Hornbach Holding AG & Co. KGaA Stock

Good morning, and welcome to our Q1 update call for HORNBACH Holding. My name is Antje Kelbert, Head of Investor Relations. Earlier today at 7 a.m., we published our financial results for the first 3 months of fiscal year 2026-'27, covering the period from 1st of March until the end of May 2026.

I extend my warmest welcome to our CFO, Dr. Joanna Kowalska, who will be our host today presenting our latest set of numbers. Please note that this conference call, including the Q&A session, will be recorded and made available along with the transcript on our company website. Kindly also take note of the disclaimer, which applies to the entire presentation as well as the Q&A session. After the presentation, we will take your questions. The technicalities will be explained by our operator at the beginning of the Q&A session.

With that, I'm delighted to hand over to Joanna to walk us through the key developments of the first quarter of this year. Over to you, Joanna.

Good morning, everyone. Thank you, Antje. It's a pleasure to be back and to share our latest results with you. Before turning to the details, let me briefly outline the broader macroeconomic and retail environment we faced over the course of the first quarter. Consumer sentiment remains subdued, particularly in Germany, but also across other markets. GDP growth and forward-looking expectations remain modest overall. However, against this backdrop, we have made a successful start to the new financial year. And on a personal note, I'm incredibly proud to be serving as CFO at a time when we have recorded the highest quarterly net sales in our company's history, with May being the strongest month ever.

This positive development has -- was driven by solid like-for-like sales growth in our existing stores, along with additional contributions from newly opened stores. The spring season went well, with customers appreciating our broad and project-focused assortment and services as well as our everyday low price promise. While these achievements belong to the entire organization, it's rewarding to see our strategy, execution and teamwork translate into record results. Overall, I can say we are happy with our figures, especially against the backdrop of the challenging macro environment I have just outlined.

Let me now guide you through today's results. We will cover 3 topics. The first one, an overview of the Q1 key financial figures. The second one, details on the P&L, balance sheet and cash flow. And the third one, the guidance for the current fiscal year. Let me start with the key financial figures. HORNBACH Group net sales reached EUR 2 billion, an increase of 4.9% from last year. This was mainly driven by international sales at HORNBACH Baumarkt AG. Like-for-like sales at HORNBACH Baumarkt grew by 2.8% and once again outperforming the DIY sector as a whole. The DIY sector in Germany saw significantly weaker figures from March to May compared to our results. This is based on data by the industry association, BHB. And additional market research data proves that in our other European countries, we at least matched or outpaced the overall sector performance.

Gross profit increased by 4.0% or EUR 27 million to EUR 700 million. This resulted in a gross margin of 35.0%. Adjusted EBIT reached EUR 161 million, matching last year's level. We opened a new store in Trnava, Slovakia and continued to invest in further future growth. Overall, we remain very much committed to our organic expansion plans. And despite recording higher CapEx, our free cash flow was only slightly below prior year's level.

So what do our Q1 figures look like in detail? Let's start by taking a closer look at our sales performance. As yet mentioned, group sales increased by 4.9% to a total of EUR 2 billion. Looking at sales at HORNBACH Baumarkt AG, we saw an increase of 4.7% to EUR 1.9 billion. We are benefiting significantly from our diversified European footprint. Sales in our other European markets grew by 7.5% and now account for 53% of group sales. However, Germany also achieved sales growth of 1.8%. We further strengthened our international presence, and our business resilience is resulting from a well-balanced geographical mix. We remain firmly committed to this strategic direction and continue to push ahead with our expansion plans in a controlled manner. Also, Baustoff Union, as you can see, contributed to our growth, increasing in sales by 6.8%.

And now let us take a look at market shares in the DIY retail segment. Once again, we were able to further expand our market shares in all HORNBACH countries for which data is available. The left side shows our top 3 regions in terms of market share growth. In Czechia, we are #1, and were able to further increase our market share to above 40%. This is a continuation of a strong momentum of recent years. In the Netherlands, customers value our product-focused offering. This has led to an increase in our market share to 40.4%. We also continued to improve our position in Switzerland. The right side of the slide shows that we also achieved gains in highly competitive markets such as Germany and Austria. In Germany, our largest market, market share rose further, an increase of 0.5 percentage point year-on-year. We also recorded further gains in Austria.

Overall, these results underline that HORNBACH is very well positioned in its market, and our ambition is to continue strengthening and expanding our presence across Europe. And this is not only about expansion, but also very much about driving profitable growth in our existing retail space. We were yet successful in this regard in the first quarter of '26-'27. As you can see, sales on a like-for-like basis, excluding new opened stores, increased by 2.8%. This was preliminarily driven by bigger basket size, but also customer frequency developed positively.

You can see that our international regions are growing relatively faster on a like-for-like basis. However, Germany also recorded growth of 1.0%. This means that we once again outperformed the German DIY market, which developed negatively from March to May. The other European countries achieved growth of 4.4%. We achieved these growth rates against a very strong prior year quarter, underlying our resilience. Our top 3 performance in this respect are Slovakia, the Netherlands and Czechia. Slovakia recorded strong growth of over 9%. In the previous year, local purchasing power had been subdued due to political changes. The Netherlands continued its successful development, achieving growth of just under 9%, and Czechia grew by 5.6%, showing even stronger growth than in the prior year quarter.

All other countries performed also very well. At the bottom of the table, you can see a decline in Romania, where consumer sentiment is temporarily impacted by tax increases impacting consumer spending in general. Overall, like-for-like sales growth trends give us confidence for the future. Considering that sales development was also affected by negative calendar effects, this performance is particularly encouraging. We had 2 business days lower than in the previous year, and also our e-commerce contributed to the increase in sales.

Here, we recorded an increase of EUR 20 million, which is a plus of 9%. Direct delivery accounted for the largest share of our online business, growing by 5%, and Click & Collect recorded an increase of 18%. This development shows us that our Click & Collect offering is meeting customers' demand. As you can see, the e-commerce share of HORNBACH Baumarkt sales rose to 13.6% in the last quarter. And compared to the pre-pandemic period, we have nearly doubled our e-commerce sales. By seamlessly integrating our e-commerce offering with our stores, we are able to provide customers with a truly interconnected shopping experience. We were among the pioneers in Germany in the e-commerce space, investing in this business more than 15 years ago. And this is now paying off.

Let us now have a look on the profits for the period. Our gross profit increased by EUR 27 million. The margin -- the gross margin was slightly below the prior year at 35%. The development of gross profit was preliminarily driven by sales growth. At the same time, challenges in logistics and increasing purchase prices driven by the current geopolitical environment put pressure on the margins. We are monitoring, of course, these developments very closely and aim to mitigate the impact through prudent planning.

On the right side, you can see the total costs, which increased overall by EUR 27 million or 5.2%. We were able to fully offset the increase in cost through higher gross profit. Where did the increase in costs come from? Mainly from selling and store costs. Those rose due to new stores and increases in operating costs, mainly maintenance, cleaning and payment transaction costs. However, the cost ratio remained stable at 22.6% of sales.

As you can see also, general and admin costs also increased. Here, too, higher personnel expenses were the main driver as expected. And in addition, costs for our IT infrastructure have increased. These investments are essential for us to future-proof our business model, optimize processes, increase efficiency and consistently drive forward our digital transformation.

The central cost ratio remained at a comparable level to the previous year. Preopening costs were slightly before the previous year's level. And as personnel costs are the key component of both store and central costs, let me briefly provide you here some further details on that. Total personnel costs across all mentioned cost categories amounted to around EUR 370 million, an increase of 5.5%. This increase was mainly driven by a higher number of employees as a result of the new opened stores compared to Q1 of the prior year as well as salaries.

Let us now turn to adjusted EBIT. Adjusted EBIT amounted to EUR 161 million, remaining largely in line with the prior year level. There were no nonoperating effects to adjust for the first quarter. On the right side, you can see the contribution from Germany and the rest of Europe to adjusted EBIT. Countries outside Germany contributed 62% to adjusted EBIT. This share increased and is 2 percentage point above the previous year's level.

Let us now take a look at the cash flow statement. Operating cash flow plays an important role in our strategy of organic expansion, which is largely financed by our cash flow. The slight increase in operating cash flow to EUR 199 million was mainly driven by increased funds from operations. CapEx amounted to EUR 56 million and increased by EUR 11 million compared to the previous year. This is in line with our strategy of organic growth. Around 46% of investments related to land and real estate, preliminary in connection with the development of new store locations. 34% of investments was located -- was allocated to store equipment for new and existing stores.

The remainder was invested mainly in software to further advance digitalization. And in this context, migration to SAP S/4HANA should also be mentioned, which is being driven forward with high priority. Free cash flow after CapEx and dividend payments amounted to EUR 143 million. The elevated cash flow from financing activities includes new promissory note loan. This will be used for refinancing the bond of HORNBACH Baumarkt, which will be redeemed early at the end of July.

Due to the new loans, the balance sheet total increased to EUR 5.3 billion. The equity ratio decreased to 42.3%, in line with the higher balance sheet total. However, it remains at a very solid level. Net financial debt decreased by 9.2%. This was mainly due to the higher liquid funds. And the leverage ratio defined as net debt-to-EBITDA of 2.5 was below the year-end level. Looking ahead, we will continue to manage our leverage prudently. At the same time, we will ensure efficient financial flexibility to support further organic growth.

This brings me to our guidance for the current fiscal year. We made a successful start to the '26-'27 financial year. We also saw a good customer response in the first weeks of Q2 and expect to benefit from the selling days that were missing in Q1. At the same time, there exist many uncertainties. Challenges in logistics arising from the current geopolitical situation as well as rising raw material prices are expected to persist for the time being and continue to put pressure on margins. Also, discussions on wage arrangements with trade unions are currently still ongoing in Germany. Based on the outcome, this might have an effect on personnel expenses.

Against this backdrop, we remain prudent in our forecasts and confirm the guidance issued in May. For the HORNBACH Holding Group, we currently expect net sales to be at or slightly above the level of the prior year financial year. Adjusted EBIT is expected to be roughly at the previous year's level. We will continue to maintain a controlled pace of further organic expansion. Therefore, we expect increased investment in the coming financial year. CapEx is likely to be significantly above the prior year level, and for sure, this will put some pressure on our free cash flow compared to last year.

Nevertheless, our operating cash flow remains solid. As long as this holds, investing in future growth opportunities justifies a somewhat lower free cash flow in the current fiscal year. We continue to see significant medium- and long-term growth potential in the home improvement sector. All in all, we are pleased with the results in the first quarter, and Q2 has started, and we are well prepared. We are doing our best to maintain our positive momentum and continue delivering a strong performance. Just in line with our motto, there is always a job to be done.

Thank you for your valuable insights, Joanna. We are now happy to take your questions. In the interest of time, please limit yourself to 1 or 2 questions. Please state one question at a time. And now I hand over to our operator to explain the technicalities of our Q&A session. Please go ahead.

[Operator Instructions] There is Mr. Maul. Mr. Maul? So we might move to another participant, Mr. Bosse.

Can you hear me?

Yes, we can hear you.

Perfect. Okay. Sorry. I would have 2 questions. You speak about cost increases in general, but you also mention negotiations with the trade unions, so also potential cost increases. Could you give us here an update? What kind of negotiations are currently running? And what kind of outcome do you expect from these trade unions negotiations and from the overall cost inflation trend, which we see, to get your view here? And the second question would be on the 2 openings. Congratulations to the first opening in Q1. Where and when will be the mentioned 2 other openings in the year to come?

Volker, thank you very much for your question. Let me start with the first one on personnel costs, the development there. Personnel costs increased by 5.5% in the first quarter. And as I mentioned, there are some negotiations in Germany. The situation is this: that the negotiations start always once a year, and we never know how will be the outcome, yes. Therefore, it is very difficult to make any clear statement on this matter. But of course, we plan with the increase and for the full year with 4% nearly. And we -- yes, the prediction is very difficult.

But to be honest, the cost increases are in line with HORNBACH's strategy and the growth agenda. The increase in expenses reflects 2 factors. The wage increases as always to keep pace with inflation, and also the increase in head count, which is a natural consequence of our ongoing expansion program with the opening new stores. And to be honest, I see we are investing in our employees, and this is really an asset of HORNBACH. Investing in employees is essential to expand our customer reach and to continue providing first-class service at every location.

And if you consider that we performed such as we performed even in this strong competition, even in these challenging times, having the best quarter results ever, in the history. Our strategy to really invest in the people is, I think, very, very good. And -- but of course, we always are committed to finding the right balance between investment in our people and maintaining the cost discipline. Therefore, also we -- yes, we are -- we monitor all costs and try to find efficiency gain going forward.

Yes. I do not complain about your strategy, and I see the reasons for investing. Just for a clarification, you mentioned you have 4% full year cost increases. This is on personnel costs or cost increases overall. And if you say in personnel costs, this includes also new employees, of course, on the back of the store expansions.

I mentioned the 4.4% increase. It relates only to the personnel costs.

And includes new employees as well, right?

Of course, this is total. And yes, this is a roughly prediction. [ Never know what ] it will come. And...

Would you say that overall cost inflation is also in the range by 4%, so exclude -- or including personnel, overall costs, so to say, OpEx in general? Is that a rough

It's difficult to say. To be honest, of course, as I mentioned, we have also pressure in the gross margin, logistic costs, and to make any prediction on the increase of this cost or energy or -- it's very difficult. Yes, but 60% of our total costs are personnel costs. Therefore yes. And Volker, you mentioned also the question, too, about other openings, yes. So we plan 2 new openings. The first one is Vloeren in the Netherlands, and the second one is Graz in Austria.

When to come roughly? Summer, autumn or next year?

Yes. Both are planned for autumn this year.

So we move to another participant dialed in by phone, Mr. Heider.

It's Michael Heider from Berenberg Bank. [Foreign Language]

Mr. Heider, in English, please.

Yes. Okay. Sorry for that. I have 2, 3 questions, if I may. First one on CapEx. We had EUR 55 million, or you had EUR 55 million in the first quarter. Last year it was EUR 220 million. You say this year you expect significantly higher CapEx. I suppose that's in relation to the 2 more openings coming. But I mean, is there -- can you be a little bit more specific here after the first quarter? Yes, is my assumption right here that this is going to accelerate in the rest of the year? That would be my first question.

Then second question on the Baustoff Union, which saw a nice acceleration in growth, can you give us the reasons behind this? And then the last one, you touched upon it, but maybe you can elaborate a little bit more on the current pricing environment. Do you think we have reached the peak here now with the political situation currently? Or what is your expectation here?

Thank you, Michael, for your questions. So I'll start with the first one about the CapEx. Yes, the CapEx grew by EUR 11 million, and it reflects the higher investment in expansion. To your question, to be more specific on that, unfortunately, I appreciate your interest in this topic. However, this is not information we disclose. And I can only tell you our strategic growth strategy, yes. In this year -- we have in this year many opportunities and also many options to invest. Therefore, I announced that the CapEx will be at higher level than the last year. Let me answer -- and the second question was about

Baustoff Union.

And here, we are really happy and very, very satisfied with the development in this quarter. This is really something which we, for a long time, waited for. And both driven by existing location plus the M&A transaction. Maybe you remember St. Wendel. We bought a small store or location from Baustoff Union, but the most impact of the growth are coming from existing locations, and we are very happy having the situation now. And of course, the situation stays tense in the building sector. But yes, we hope that the next months will develop as in the -- yes, in the same line with the last month. We hope. We will see.

So is this related to increasing construction activity in the area or you gaining market share or something?

We see a little bit of recovery in the building sector. Last year, we see that the permit -- how to say permit

Building permit.

Building permits were rising, and it was last year. Therefore, I think this is a result of that. Of course, good weather, yes. And yes, we have to see how the next months will develop.

And your question three was the, yes, the current situation on the market and the price increases. Let me answer in this way. The situation remains volatile. Of course, supply chains from Asia continue to face extended lead times and higher container rates, and more and more suppliers really are demanding higher prices nearly each day. And we are continuously in negotiations with them. And not all claims are justified, but in some cases, we need to make concessions.

What we value long-term supplier relationships, and it is important to us that our supply chain remains stable to provide our customers with everything they need. And to make some details on the price increases, this preliminary affects all freight-intensive product ranges, such as building materials, garden constructions materials as well as oil-based products. And this is only a part of our product range.

What we see is the increase in freight costs. And this affects not only HORNBACH directly, but also our suppliers. Therefore, yes, we -- the pressure on the gross margin is expected to continue in coming quarters at a similar level, I would say. Of course, yes, we all know the current situation is very volatile, and each day we have new news. But to be honest, yes, I expect to -- that we will face the pressure on the gross margin and higher logistic costs and purchase prices.

So we move on to the next participant, [ Mr. Saripalli ]. So this seems not to be able for him, unfortunately. And we therefore get to Mr. Miro Zuzak.

Can you hear me?

Yes, we can hear you.

I have a question regarding the reverse factoring program. So I see from -- I would like to understand how it works. I see from, basically, the balance sheet that you repaid EUR 149 million during the quarter, and I would like to understand against or how this is booked. Basically, what -- how -- whether this moves through the P&L or how it moves through the P&L and the cash flow statement.

Yes, so how to understand the reason of that? I think this is a normal procedure. We see for the last couple of years, we are conducting this instrument. So in Q4, we normally start with that. We are then fully repay in Q1. So this is the pattern. In the end, it's to prolong our paying terms to industry standards. So it's a procedure. I think we've taken over a couple of times now to make balanced cash flow situation. This is just to smoothen our cash flow structures. And I think the booking will taken by Joanna.

So of course, the EUR 150 million from the last year was recorded as a payables and when we repay this, we have this not on our balance sheet. This is a matter of cash, yes. But in the P&L, we only see the cost for this program, and the benefits of the program clearly exceed the costs. We had -- in the last year, we have EUR 100 million of the reverse factoring, and now in this year we had the EUR 150 million. And in the current financial year, we plan to use it at the same level.

And sorry to ask it again. So if you repay the roughly EUR 150 million, what is -- basically it reduces your liability? Is it booked against cash? Or is it booked against another like balance sheet position against, I don't know, inventories or...

No, no. This is like payables to suppliers. Therefore, yes, with this instrument, we just postpone our payment terms, and have a little bit air to -- yes, to balance our season.

And the account would be payables?

Exactly. Exactly.

So due to the fact that we don't have any risen hands, I hand back over to Antje Kelbert.

Okay. So thank you. Those who had some technical issues can always come back to us. So for those who were unable to unmute and post their questions, so we are here at the Investor Relations team, just come back to us. But the other questions, it looks like all those have been addressed now. And with that, also thank you for Joanna for her contribution today.

After the summer break, we will have already scheduled participation in several capital market events and conferences. And we look forward to engaging in personal conversations with many of you there. So you can also find an overview of the upcoming Investor Relations activities on our website. So as already said, if anything comes afterwards or you were not able to post your questions during the call, just don't hesitate to come back to the Investor Relations team.

And all the others, thank you very much for your interest and time this morning. We hope to see you soon, and we wish you a great summertime. Thank you very much.

A warm welcome ladies and gentlemen. I would like welcome you on behalf of HORNBACH Group and the Investor Relations team. Welcome both to Frankfurt and on the webcast for this year's analyst and investor conference.

I would also like to warmly welcome our members of the Board: Albrecht Hornbach; Erich Harsch and Dr. Joanna Kowalska, the latter for the first time. To begin with, Mr. Albrecht Hornbach is going to give you an overview on the general development of the HORNBACH Group. Before Erich Harsch is going to share his insights into HORNBACH Baumarkt AG. Following that, Dr. Joanna Kowalska is going to reflect these developments in her figures. [Operator Instructions] At the beginning of the Q&A session, I'm going to give you some more detailed information.

Before handing over to Albrecht Hornbach, I would like to briefly point out that this conference is going to be recorded. The conference language in this room is German, but feel free to ask any questions you may have in English on the chat, and we have simultaneous translation and interpretation for the webcast. Towards the end, there will be a transcript of our conference, so you can look at all up in detail. [Operator Instructions] Please note our disclaimer. It applies to both the presentations and the Q&A session.

And now it's my pleasure to hand over to Albrecht Hornbach.

Ladies and gentlemen, this is the Analyst and Investor Conference of HORNBACH Group, and I would like to warmly welcome all of you. It's a pleasure to see you here in such large numbers, it's truly a competent circle. I would also like to welcome our participants on the webcast.

Many of you have known us for a long time. They have been reporting about us on a regular basis in their analysis, et cetera. And we know that in today's fast-paced world, this is anything but a given.

In the following, you are in for some beautiful reports, among others, to be given by Dr. Kowalska, our CFO. For the first she is going to speak to us in the context of this analyst and the investor conference. She is going to share the key performance indicators for the 2025-'26 fiscal year for you. And Mr. Harsh will then explain in detail the developments in our home improvement business for this period. Change before you have to. This is a well-known quote from Jack Welch, one of the most successful American business executive, as I'm sure you know.

In my remarks, I would like to clarify what this means to us as a retail company. As you know, the retail industry in Europe is facing major challenges. The war in the Middle East, the blockage of sea routes, higher commodity and energy prices, these are events over which we, as retailers, have no control. But we can take action to improve people's lives. With our product range, our services and many effective solutions we want to serve people and help improve the lives of more than 166 million people in 9 European countries. At the same time, we are making positive contributions to value creation.

New stores are added every year, most recently in April in Trnava, Slovakia. We are expanding our product range, enhancing our services and improving processes, always with the goal of providing customers with the best possible support for their home and garden projects. Our success in this endeavor is reflected in the growth in net sales EUR 6.43 billion in the 2025-2026 fiscal year. This represents a 3.8% increase over the same period last year, and this is in line with the forecast published in May 2025.

What is particularly encouraging is that this growth is not solely due to expansion, but that we achieved a 2.4% increase on a like-for-like basis as well. So HORNBACH is performing significantly better than the DIY sector as a whole based on figures published by the Industry Association, BHP.

Our financial results also demonstrate how well-positioned we are as a project partner for DIY enthusiasts, tradespeople and commercial customers. Despite significantly higher costs, the HORNBACH's adjusted EBIT for the fiscal year was EUR 264.7 million remaining virtually at the previous year's level.

Why are we so successful? Because we think of our company from the outside in. Specifically, this means people's needs are the starting point for our actions. We look at our range of services from the outside and ask, what has changed? What do people really need and how can we best support them in their projects, for example, through an innovative product range. And most importantly, for us, as the price leader, how can we offer our products and solutions as affordably as possible.

A broad yet deep product range with high product availability across more than 12,000 square meters of brick-and-mortar retail space, combined with a guarantee of permanently low prices ensures that everyone can afford a beautiful home. All of this comes together to create a seamless shopping experience across all channels.

Our online sales contributed 12.7% to the DIY division's total revenue in fiscal year '25, '26. They rose by 7.1% year-over-year to EUR 771.4 million. Our interconnected retail strategy, which we have been pursuing for more than 15 years now, is a fitting example of the principal change before you have to.

The challenge is for our logistics, IT and especially our merchandising are significant. Fortunately, we have a successful manager on board, who is highly respected in the industry. Susanne Jager Jager. Last December, the Supervisory Board renewed her appointment to the Board of Management. Susanne Jager age has been with our company for more than 40 years. She is responsible for a product range comprising hundreds of thousands of items. And together with the teams, she designs many service offerings. In addition to Susanne Jager, the appointments of [indiscernible] Hornbach and Niels Hornbach to the Board of Management of the Baumarkt AG were reviewed in the past fiscal year.

With their areas of responsibility, merchandising, operations, e-commerce, logistics and construction, they form the heart of our company. In addition, we expanded the management Board of HORNBACH Management AG, the general partner of HORNBACH Holding AG and Co KGaA, to ensure its future viability. These changes will take effect when I stepped down at the end of October. Erich Harsch will become Chairman of the Management AG's Board of Management on November 1, 2026. He will assume this role in addition to his appointment as Chairman of the Baumarkt AG Management Board. The Board will be completed by our CFO, Dr. Joanna Kowalska, who will be responsible for all finance functions as well as audit, legal, compliance and Investor Relations.

It will also include Hornbach and Neils Hornbach, who will be responsible for the real estate, new markets, specialty retail and digitalization business units. The appointment of Jan and Niels Hornbach to the Board of Management are another important step toward generational transition and the family run future of our group. I am very grateful to all our Board members for rising to the challenges and shaping our group of companies with such energy and passion.

In addition to our home improvement stores, garden centers and specialty flooring stores, we have a strong presence in the building materials trade through HORNBACH Baustoff Union in Southwestern Germany and in France near the border with a total of 39 locations. This subsidiary accounts for 5% of the group's revenue. With a slight decline in revenue of 1.3% to EUR 352 million net in fiscal year 2025, '26, HORNBACH Baustoff Union continues to be burdened, as expected, by the ongoing weakness in the German construction sector and a reluctance to invest. Nevertheless, this business segment is strategically important to us.

With the acquisition of a site in as of March 1, 2026, we specifically strengthened our regional market position in Zailand. Ladies and gentlemen, the interplay between continuity on the one hand and the willingness to embrace change and adaptability on the other is essential in our industry. It is not just a matter of approaching innovations with an open mind, but of actively shaping them.

I would like to thank our colleagues all 25,514 colleagues in our group for their willingness to do so as well as for their extraordinary commitment and can-do spirit network. You all contribute to our successful business performance and to our ability to pay out an undiminished dividend every year for the past 39 years.

For the fiscal year 2025, '26, we proposed a dividend 2.40 per share to the Annual General Meeting of HORNBACH Holding. The payout ratio would thus be 28% and the amount is the same as in the previous fiscal year. While investing in new markets and new technologies, we intend to remain true to our approach of paying a dividend at least at the previous year's level.

Looking ahead to the current fiscal year 2026, '27, we remain confident even though the market environment remains challenging. The DIY market in Europe is highly attractive. Demand is particularly high in Eastern European countries, and the overall market situation is favorable. You just have to look at the age structure of residential buildings to see the opportunities, both for affordable alternatives to hiring a tradesperson and for attractive do-it-for-me services. We are, therefore, consistently pursuing our growth strategy, investing in new locations, digitalization and operational excellence.

In view of the steep increase in commodity prices and based on our calculations, we anticipate total revenue for the current fiscal year 2026, '27 to be at or slightly above the previous year's level. We expect adjusted EBIT to remain at the previous year's level.

We are sure you understand that, particularly in light of current challenges, we remain cautious in our forecast this year as well. Although the spring season has gotten off to a promising start so far, we expect that current developments may continue to affect retail demand negatively.

Our financial strength contributes to our resilience, enabling us to invest continuously in a store network that currently spans 9 countries and will soon expand to 10. We are working ambitiously on the further digitalization of our business model to maintain and expand our strong market position.

The use of artificial intelligence and the latest software solutions drives productivity gains that positively impact sales per square meter. In short, we work on solutions and implement ideas before others do. And that is what I mean by the quote change before you have to.

This concludes my remarks. Following the other presentations, we will be happy to answer any questions you may have. Thank you for your attention. Mr. Harsch will now report on the developments at our Baumarkt AD.

Thank you very much, Mr. Hornbach. So what you've said about our group. Ladies and gentlemen, I would also like to extend a very warm welcome to you today. Welcome to our annual press conference. I would now like to join you in reviewing the developments of HORNBACH Baumarkt AG. A key factor in our success is and remains our clear positioning as a reliable partner for both DIY enthusiasts and professional customers. And the emphasis here is on reliability.

While manage things in our lives are changing rapidly beyond our control, we, at HORNBACH, aim to provide stability, one's own home, balcony or garden are important havens that one can preserve and personalize. Quite how successfully we have to offer the right solutions in this respect is shown by the continued growth in our customer numbers.

Customer footfall rose by 3% in the past financial year. It is a key driver of the growth in net sales to EUR 6.1 billion in the past financial year at HORNBACH Baumarkt AG. We're talking about an increase of 4.1%. Adjusted for store size and currency effects, we recorded growth of 2.4% and the average ticket rose by 0.6%. The productivity of our DIY and garden centers continued to improve overall. The average annual net sale of one of our DIY stores amounted to EUR 34.9 million in the reporting year. We continue to hold a clear lead over other market players in terms of our sales per square meter. Our surface productivity rose by 1.9% to EUR 2,903 net sales per square meter.

Market shares were also further expanded. In the Netherlands, the market share rose to 29.4%, in the Czech Republic to 38.8%, in Switzerland to 15%, in Germany to 15.7% and in Austria to 17 6%. These are the countries we have reliable figures about from market research companies, et cetera. We don't have figures for the other national entities. These are all very encouraging results given the subdued economic momentum in Europe. And overall significantly better results than those of the industry average.

The DIY Industry Association, BHP and the Market Research Institute, GFK have forecast 1.6% decline in gross sales for large format DIY stores in Germany by 2025. So you can see quite how strong we are by comparison. So this is just as a reminder.

Ladies and gentlemen, at the end of the financial year, am AG operated 176 stores. 97 DIY and garden centers in Germany, 3 burden house specialist flooring stores and 76 Y and garden centers in 8 other European countries. Four new stores were added in the past year -- in the past fiscal year. In March 2025, in Duisburg, in September in Burgenland in Austria, which is the country I come from. And then in September, in Bucharest in Colentina in Romania and in October, another store followed in [indiscernible] in Romania, bringing the total to 11 stores in Romania.

There was also growth in the Borden House specialist flooring stores. In November, we opened a new specialist flooring store in [indiscernible] here in Germany. And previously, there had been a DIY store at this location. We are maintaining this high pace of expansion in the current financial year as well. On the 22nd April this year, we opened a new store in Trnava, Slovakia, Northeast of the capital Bratislava, with a sales area of 17,600 square meters is a truly large state-of-the-art store. I went there for the opening, and it's a really beautiful store. So we opened it, and this is the sixth HORNBACH store in Slovakia as it were.

In September 2025, we began construction of a new store in Graz, Austria. Graz will be our third location in Steria. This forward-looking store with a sales area of around 15,000 square meters is scheduled completion by the autumn of this year. This marks another significant step in our expansion in Austria. At the end of March 2026, we went Sweden in Hayden stop in the municipality of celebrated the groundbreaking ceremony for a new DIY and garden center together with representatives from the town. The opening of the ninth store in Sweden is planned for spring 2020. As you know, we're also working on establishing a new national subsidiary to this [indiscernible] was appointed country manager for the new HORNBACH Company in Serbia last year. He will assume overall responsibility for market entry there. The Serbian DIY market has so far been significantly less dominated by large-scale operators with an international presence, so we, therefore, have favorable conditions in place to proceed in a structured manner and to develop and operate large-scale stores for the country's key urban regions, including Belgrade, [indiscernible].

The sites required to achieve very good coverage of the Serbian market have already been secured under contract and are currently in the approval phase. Construction of the first location in the southern part of the capital bill grade is scheduled to begin in summer 2026. Construction of a further location will follow later properly in the autumn of 2026.

All of the stores in Serbia will be built to the standards of the German Sustainable Building Council, at least the so-called silver category. This means that operations will utilize energy-efficient solutions such as photovoltaics and heat pump technology without the use of fossil fuels. So in other words, following the exact principles by which we develop and build our stores in other national subsidiaries.

In addition to our physical expansion, we are continuously working on expanding our interconnected retail architecture to further enhance the shopping experience for our customers. High performance and scalability are just as much a focus here as all matters relating to IT security, which is, of course, a topic that's becoming more and more important.

Naturally AI is also used in a wide range of areas. A concrete example is a so-called assistant, which helps both colleagues on the shop floor and customers with advice, preparation and planning and product selection. It provides comprehensive product information and supports the advisory service. The AI assistant draws on verified information from the HORNBACH systems. So you can trust data as our suppliers, and we invest heavily in good data maintenance. This assistant is available to our customers via the HORNBACH app and the online store. Our staff can use an app on their own devices, on their work smartphones and the PCs in the stores.

New services such as the Maha Assistant are highly visible the added value is quite clear. However, we are, of course, working on further technology projects, for example, to optimize order processing and supply chain management. An important ongoing project remains the migration of the SAP ERP system to S/4HANA, where we aim to reach another milestone by the end of this year.

The expansion plans, the technology projects, the further development of our popular own brands, the design of our very extensive product range, negotiations with supplier partners and much more, all of this places great demands on our colleagues. Given the positive performance in the past financial year, the effort is clearly paying off, and we can look back on our achievements and towards the future with optimism. HORNBACH is and remains a reliable partner for customers and their projects and at the same time, for the employees of our consortium.

On behalf of the entire management board of HORNBACH Baumarkt AG, I would like to express my sense thanks to all of our colleagues for their dedication and commitment. Ladies and gentlemen, as we now turn our attention to the current financial year, we see, on the one hand, a positive trend in our spring business.

At the same time, we are, of course, also seeing the impact of the mall in Iran on raw material and energy prices. We have to define clear priorities. And once again, reality -- reliability is key. Firstly, in terms of product supply; secondly, regarding price leadership, the promise to be the cheapest supplier and to focus on permanently low prices rather than offering short-term discounts is a matter, of course, for us, particularly in these times.

We ensure stability and consistency in our customers' everyday lives. To this end, we are in constant intensive dialogue and negotiations with the manufacturing industry. We cannot accept unjustified increases in purchase prices as this would undermine our customers' interests. Of course, there are situations these days where things have to change where this is inevitable. However, our product isn't really the goods themselves, but rather what we aim to achieve is enthusiastic customers, and this is also stated exactly this way in our mission statement.

I would like to take the opportunity to thank the members of the Supervisory Board for appointing me as Chairman of the Management Board of HORNBACH Management AG with effect from the 1st of November and I would like to thank the Supervisory Board for the trust they have placed in me. I look forward to continuing to work closely with my colleagues on the Management Board. And now I would like to hand over to our CFO, Dr. Joanna Kowalska. Thank you very much for your attention.

Thank you very much, Mr. Harsch. Ladies and gentlemen, I am very pleased to welcome you in person today to my first analyst and investor conference at HORNBACH. My name is Joanna Kowalska, and I have been responsible for finance at HORNBACH as CFO since August 2025.

Allow me to say a few words about myself for those who do not yet know me. I began my career at KPMG in auditing and consulting. I then spent 17 years at the Obi Group, most recently as Managing Director of Finance and an extended board member. So I know the industry firsthand. Numbers and the home improvement industry are practically in my blood. And now I look forward to actively applying this experience as CFO for HORNBACH.

What is particularly important to me is taking responsibility, demonstrating integrity and humanity and building trust. That is what matters to me. That is what I've experienced in the past 9 months at HORNBACH every day. For me, this is proof of the fact that a value-based approach and profitability are not mutually exclusive on the contrary. They fit together well and they mutually enhance each other.

And now it is my pleasure look into the key performance indicators with you. HORNBACH has developed very positively in a very challenging environment, as we all know. What is a particular pleasure to me is that our gross profit grows more steeply than our cost. And this did not come by coincidence, it is the result of increased sales, thanks to our highly motivated colleagues in the stores. And our merchandising team too has done a great job. And last but not least, our cost discipline also contributed its share.

In the next 20 minutes, I will look into 3 questions in particular. First, how did we manage to grow in a very challenging environment. Second, how has this growth impacted our financial figures. And third, looking ahead, what is our forecast, what is our view of the current fiscal year and what is particularly important to me as the CFO.

I'll start with the topic of growth. As we know, geopolitical conditions have had a significant impact on the overall economic and industry-specific environment. 2025 was a challenging year to the European economy. Nevertheless, HORNBACH has managed to grow. How did we manage to do that? Let's take a look first at the highlights we achieved last year. Our customers' trust was clearly reflected in our sales growth. We were able to increase market share, sales density. And what is particularly important to me is that the gross profit grows more steeply than the cost.

How did we get there? We focus on our customers and our core competencies. Our focus is on what we are really good at and we have had a strong record in this for many years. That's how we attain our goals. And for the past fiscal year, we can say that again, we delivered on our promise. Here, we can see the guidance, the forecast we communicated in the previous year. And we achieved it. Group sales went up to EUR 6.4 million. And this is clearly above the prior year's level and within our communicated bandwidth.

For the EBIT, the same thing held true. We attained our goal, EUR 265 million, only slightly below the previous year's EBIT, representing a decline of 1.8%. So again, this figure is within the forecast range. These figures show our business model works even under challenging conditions.

What do our figures for the 2025, '26 fiscal year look like in detail? Let's first look at revenue growth. Consolidated revenue rose by 3.8% in the last fiscal year to a total of EUR 6.4 billion. If we look at HORNBACH Baumarkt's revenue, we can see an increase of 4.0% to EUR 6.8 billion. This is in the central portion of the slide.

HORNBACH has thus performed significantly better than the DIY industry as a whole. We benefit greatly from our international focus here. Sales in our European markets rose by 5.5%. It now accounts for 53% of the group's revenue. Our resilience is thus significantly strengthened by our geographic diversification. We remain firmly committed to this strategic orientation and are consistently driving our international expansion forward. Revenue growth is also reflected in the development of our market shares.

Let's take a look at the map here. On the left, we can see our top 3 regions in terms of market share growth. In the Netherlands, our customers appreciate the high product availability and our consistently low prices also build trust. Both customer traffic and average ticket value have increased.

In the Czech Republic, we were able to further expand our market share, too. And we can see that in markets such as Germany and Austria, we were also able to gain ground. You can see this on the right. Our claim is to continue to strengthen and expand our market presence in Europe. But for us, this is not just about expansion. It's also about growth within our existing retail spaces. Here, too, we were very successful in the last fiscal year.

Our like-for-like sales without the newly opened stores rose by 2.4%. Germany showed slight growth of 0.8%, and this goes to show that we are clearly better than the German DIY industry as a whole, which has developed negatively.

The other European countries recorded growth of 3.8%. Our top 3 in this regard are the Netherlands, Sweden and Switzerland. The other countries performed solidly given the prevailing conditions. Like-for-like growth makes us optimistic about the future. Online retail is also contributing to the increase in sales. Here, we see a sales increase of EUR 50 million, which corresponds to 7%.

The share of e-commerce in HORNBACH Baumarkt sales rose to 12.7% in the past fiscal year. This means we have been able to sustainably and significantly increase e-commerce sales compared to the pre-pandemic period. And this does not come by coincidence. We pioneered the e-commerce sector in the German DIY industry, and this now pays off.

As Mr. Harsch already mentioned, we are particularly proud of our sales density or the sales per square meter of sales floor -- surface. The graph that we can see here illustrates it once more. Our stores have an average of around 12,000 square meters of retail space, making them larger than those of our competitors. With sales per square meter of EUR 2,903 we have further improved compared to the previous year and are significantly more efficient than our competitors.

Over the past 6 years, we have increased our sales density by 22%. This underscores the effectiveness of our large format concept built on our core competencies, but we are not just performing well in terms of sales, our gross profit rose by EUR 88 million. Our gross margin improved to 35%. On the right, you can see the cost, which rose by a total of EUR 75 million or 3.8%. A comparison of the chart illustrates that we were able to fully offset the cost increase with the higher gross profit.

Let's now take a look at the costs. Most of it is due to increased costs in stores due to higher wages and additional new stores. The cost ratio, however, remained at a stable 26%. General and admin costs also increased due to higher personnel costs, plus additional costs for our IT infrastructure.

Since personnel costs play a significant role to us, I would like to provide a few details on this matter. Total personnel costs rose to EUR 1.2 billion by 4.5%. The increase resulted, on the one hand from the planned wage increases and on the other hand, from the increase in the number of employees due to newly opened stores.

Let's now turn to adjusted EBIT. At EUR 265 million, adjusted EBIT was nearly at the previous year's level. The difference was more than EUR 5 million. And this is primarily due to a onetime effect from the previous fiscal year. Refunds from the energy price cap in Germany totaling EUR 7 million led to higher other income. As usual, the result was adjusted for nonoperating effects, which amounted to EUR 8.5 million in the fiscal year. Like in previous years, these effects stem primarily from the annual impairment test.

What is interesting is that on the right-hand side, we see the contributions from Germany and the rest of Europe to adjusted EBIT. Countries outside Germany contributed approximately 76% to the adjusted EBIT figure.

Let's now take a look at the cash flow statement. Operating cash flow plays an important role for HORNBACH in terms of our organic expansion strategy. We financed the majority of this strategy from our own cash flow. Last year, again, operating cash flow fully covered investments. The increase in operating cash flow to EUR 375 million is primarily attributable to changes in working capital. investments, our CapEx amounted to EUR 220 million in fiscal year '25-'26. They rose compared to the previous year, and this is in line with our strategy of organic expansion. EUR 123 million are to be quoted here.

Our balance sheet looks solid as well. It increased slightly. The equity ratio rose to 44.5%, underscoring our continued very sound financial. Net financial debt increased by 5.6%. This is primarily attributable to the renewal of real estate leases. We will continue to monitor our debt levels very carefully in the future. At the same time, we will ensure sufficient financial flexibility for further organic growth.

We have already created a very good position and made significant progress in the current fiscal year with regard to optimizing our financing. In the current first quarter, we placed a very successful promissory note loan in the amount of EUR 300 million. We have thus secured early refinancing of a bond maturing in October this year. At the same time, we have smoothed out our maturity profile and made it more balanced by diversifying the maturities.

As Mr. HORNBACH already explained in his speech, since our IPO in 1987, we have paid a dividend every year, at least at the level of the previous year. For the 2025-'26 fiscal year, the Management Board and Supervisory Board are proposing a dividend of EUR 2.40 per share to the Annual General Meeting of HORNBACH Holding.

And this brings me to the last of my 3 initial questions. Looking ahead, what is our view on the current fiscal year and what is particularly important to me as the CFO for the future of HORNBACH.

We remain convinced of the strength and robustness of our business model and aim for reliable and continuous growth in the coming years as well. In Q1, we expect solid revenue growth even though the revenue was strong even in the previous year. At the same time, framework conditions remain challenging.

Higher purchase prices for some product categories and an increase in logistics costs are likely to impact the retail margin and a moderate increase in personnel and store operating costs is planned. Against this backdrop, we remain cautious in our outlook for fiscal year '26-'27.

For the HORNBACH Holding Group, we currently expect net sales to be at or slightly above the level of the fiscal year '25, '26, which corresponds to a range of minus 2% to plus 6%. We expect adjusted EBIT to be roughly at the previous year's level. This is in line with a range of minus 5% to plus 5%.

We are going to maintain a high speed of innovation, and this is an expansion, and this is why we expect relatively high investment costs. CapEx is expected to be significantly above the prior year level.

As Mr. Hornbach and Mr. Harsh have already explained today the DIY market in Europe is very attractive, demand for our product is particularly high in Eastern Europe, and the market situation is favorable. We intend to capitalize on the good growth potential ahead of us.

What role will finance play in this going forward? Ultimately, my goal is to ensure that HORNBACH has the financial strength to make ongoing investments. This will allow us to increase the company's value over the long term.

What are our strategic fields of action? Digitalization, profitable growth and a long-term financial strategy. Growth, what does this mean? Profitable growth is one thing above all else, clear value-driven decisions. Our performance management has been developed both in investment decisions and in cost management. This ensures that we deploy capital where it delivers the greatest value. This brings me to the second area of focus, digitalization and AI. I see the focus here on process optimization and creating a better basis for decision-making. My task is to very actively drive change in the finance sector toward a digitalized future-proof finance function.

Third, financial strategy. For me, the balance between growth and financial stability is my top priority. How do we achieve this? We actively shape our financial framework, optimize our financing structure and continuously work towards a balanced maturity profile. A good example of this is the recently placed promissory note loan, which was structured precisely according to these criteria. At the same time, we must continuously manage financial risks to make the best possible use of available funds.

A particularly important lever here is a clearly prioritized capital allocation based on strong operating cash flow and our high financial resilience. Together, these provide us with the necessary financial flexibility and stability to actively shape HORNBACH's growth, especially in a challenging environment. At the same time, we pursue -- keep on pursuing our reliable dividend policy.

As you can see, we achieved a great deal last year, and at the same time, we still have a lot ahead of us. We maintain the clear focus on what we are good at on our strength, on what has made Harber successful for decades. We, in finance, will contribute our share as a strategic partner, a co-creator supporter and a source of inspiration. There is always work to do. I'm very much looking forward to reporting next year, together with my colleagues on the board on all the new developments we have initiated and the progress we have made.

Thank you very much.

Thank you very much for the very interesting presentations about the last fiscal year. regarding our guidance. And as announced, this is the beginning of a Q&A session. Let me just explain how this works. We will start with questions from people here in the room in Frankfurt. So we've got a microphone, which we will have to, so that also those listening online can hear your questions. If you kindly introduced yourselves as well by giving us your name and who you work for, that would be great. For those who've got a question online -- please type your question in the Q&A chat. You are very welcome to also write your question in English. That's not a problem. We will then read out the questions on your behalf here and therefore, address the CEO the CFO with your questions. Is there anybody here in the room with the first question.

Thomas Maul, DZ Bank. I've got 2 questions. Now in your report, you already mentioned that the start into the spring season wasn't all that bad but was quite good. Would you elaborate a little bit talking about the footfall and the Baumarkt and how it's developing, whether customers are buying bigger projects after all again?

And then my second question is about the gross margin growth. It looked great, last year, the average growth. What's your anticipation of this year's gross profit in this challenging environment? That gross profit can outperform the net sales and grow stronger than net sales. What's your expectation?

Let me respond and talk about spring. We've already got the market figures from the first 2 months of the year, and the trend is continuing. So by comparing HORNBACH to the average industry, we are outperforming the industry slightly. And therefore, this trend is continuing also in the second quarter. So in line with our guidance that we've communicated that Ms. [indiscernible] and Mr. Hornbach, that is in line with our guidance.

As far as the assortment and the product basket is concerned, the situation is the following. Especially in those assortments, which don't depend on the season, because the season products would be garden products, of course, other products don't depend on a season so strongly so projects around whatever electrics projects, around the house, et cetera. We had a great start into the year. And the trend has been very positive. May is a little bit problematic because of the 2 national holidays and therefore, 2 sales days less than prior year's May. So whether we manage to compensate for that remains to be seen. But so far, we assume that also in June, and therefore, once we'll report on the first quarter, we can report about a very good development indeed.

Now you asked about our gross profit and its growth. Well, that like reading the crystal ball. Nobody knows what will happen in the next months after all. Of course, there are intensive talks we hold with suppliers. And there are quite a few who say that for various reasons, whether it's because of their own production, energy prices or transport freight costs with higher fuel costs, they want to increase their own prices. So this is a request we get from our suppliers very frequently.

We try to always verify whether there's a good reason for their price increase request. In some cases, the reasoning might be understandable. In others, it's not always, but sometimes changes in prices would have to stay for the long term but might only be price increases for certain limited period of time. So our colleagues in merchandising are working intensively so with suppliers to find suitable ways forward to negotiate and find solutions which are reasonable and acceptable.

Of course, the industry always requests price increases. And then as soon as the situation improves, they're not that quick in reducing prices after all. So -- but that's the merchandising colleagues job to deal with suppliers, and we're doing our very best. So it's still reading the glass ball a little bit how the remainder of the year will develop.

Next question. To be fair, maybe on the other side of the room first.

Berenberg Bank, Michele is my name. I'd like to talk about the gross profit again because in your presentation, in view of this great outlier of the gross profit last year, you said this was driven by product mix and innovation. Would you elaborate please and tell us what type of innovation you were referring to that increased your gross profit and how the product mix has changed? Will this be a permanent change? Or was that just luck, so to speak, that last year, you were just lucky how your products were sold.

Next question relates to CapEx. You expect a significant increase. Would you quantify this, please, a little bit more precisely.

Thank you. Let me answer your first question regarding innovations. What I would like to highlight is that at HORNBACH, we're extremely well positioned as far as our suppliers are concerned. Also in the past, always, we've made sure that we've had a very broad basis of suppliers where we would never be dependent on individual suppliers.

And talking about the margin in challenging times, if you've got a broad base of suppliers, this allows you to work with different suppliers and all that dependent on Asia as you would be in many other companies.

Now you asked about the product mix and innovations. Well, what is interesting I find is that we are always changing our assortment. 20% of our assortment is changed within the course of one year. In other words, we take a very close look at the market, the customer demands, what is currently being sold well and what the best match is and 20% in our market to launch innovative products is a huge amount, I believe. And this has allowed us to achieve this progress in our margin. But it's not just the product mix and innovations, but it's certainly also our own brands. So our own brands have been promoted more and more. And even this year, it grew by 10%. So certainly, our own brands are another very good reason.

The second question you asked was around CapEx. Now this is, of course, because we want to carry on expanding Organic growth in the next years is what we aim at. Of course, we are investing into our new locations, our new sites -- for next year, we've already announced that we're planning further expansions, but it's not just expansion but it's also CapEx, which is needed to invest in existing stores where a lot of cash is generated in refurbishing, the existing stores, in expanding the services and investing in AI, for example, in IT. We've already talked about AI and quite how important and that also requires CapEx in order to promote our organic growth strategy.

I've got a follow-up question because you just mentioned this, could you give us the order of magnitude, how many suppliers do you have from Asia?

Well, direct product supply is 5%. But of course, indirect product supply from Asia is higher. What is important is the 5%, which is direct. And the indirect merchandise from Asia is 20% approximately. But that surprised me a little bit to be quite honest, when I joined HORNBACH. And this shows that we are very well positioned in deep, especially in such difficult times where there are many problems in the supply chain. So HORNBACH has always been very farsighted in this strategy. Great question. Thank you for the question.

Jurgen Kolb from [indiscernible] Capital. You mentioned the number of customers that went up last year, Mr. Hornbach. From my understanding, is this an adjusted figure, so adjusted by new store openings. So is it on a like-for-like basis? Or are the new store opening impacting the figure positively. And to what degree is this important for the next years for you to acquire new customers? Where do you manage to acquire new customers? If you talked about this briefly.

Second question, you talked about the potential in Eastern Europe, mainly where you said buildings are old, et cetera. So if I take a look at the like-for-like last year. These were exactly the stores that didn't perform all that well. Will this performance still happen in future? Why is the like-for-like performance in Eastern Europe, not as strong.

Last question. Dr. Kowalska, you mentioned how important cash flow is to ensure financing. We've just heard that CapEx is increasing this year. Will there be a positive free cash flow at the end of this year despite the increased CapEx need?

Okay. I'll start talking about customer numbers. We talk about the number of purchases. So it's not direct linked to people really. It's the number of purchases that have happened in our stores when we talk about the number of customers really, it's the number of purchases.

And then the next question I assume that like-for-like as well, the number of purchases went up. But certainly also the basket size went up. We talked about this as well. And then it's both, which is important, really. Now if we take a look at the basket size and the act of purchase, how many active purchase there, it doesn't really matter whether a customer shops on various occasions and buys with a smaller basket size or shops, not so frequently, but buys many products in the basket, it doesn't really matter.

In COVID times, of course, there were basket sizes, which were huge and very few acts of purchase because customers didn't come to the stores so frequently. These days, it's different. I'm not sure we'll have to find out whether this is really the same like-for-like adjusted figures or whether the basket changes this. I'm not sure. I'd have to check. In Eastern Europe, there have been special developments, for example, VAT changes in VAT went up. And in Romania, we opened many stores. So as a result, there's a certain cannibalization effect, which has happened, and you can see that in the like-for-like figure. All in all, we're very pleased with the Eastern European development. The market share in the Czech Republic is the highest we have, more than 40% in the spring. So we're very happy about that. And this does show that it's a great market and that our market positioning, we've acquired there is great as well.

Then you asked a question, which Dr. Kowalska should answer.

The cash flow exactly. Now in times of CapEx, as I announced, where the cash, where the CapEx is much higher compared to the last years. Of course, we have to keep an eye on the right balance between growth and stable financing. We need to strike the right balance between those 2 factors. How this will develop this year remains to be seen. It's difficult to tell because we do know that operative cash flow, if you achieve the right net sales and if the gross profit is the way we hope it will be then, of course, that would be fantastic. Something we certainly do is try to always improve our performance and not just take a look at our costs, but we always also focus on our working capital.

So our inventories. So we've introduced so-called stocks committees, inventory committees to make sure that we've always got the right products available in our warehouses at the right place at the right point in time because that's important for your own cash and how this will look at the end of the year is something I can't really predict exactly today. It remains to be seen. It's difficult to tell. However, we always review very carefully where we invest. And certainly, the CapEx we're spending now is an investment into our future. It's a long-term investment. So it might well happen that for 1 or 2 years, the trend might be slightly different compared to the CapEx of the last years because the expansion performed by HORNBACH in the last years, especially in the last 5 years, was such that we didn't open all stores compared to this year and also next year and in the future. I'm not sure whether this was a good answer to your question.

Next question Ralf Marinoni, Quirin PrivatBank.

How do you assess the competition by discounters? Arnold Schwarzenegger, for example, doing advertising for tools. Would you notice something like that because he does advertising for Lidl, for example. So do you notice competition from the discounter? Second question, we saw this nice chart showing us that approximately 75% of your adjusted EBIT is generated outside of Germany. What does this mean in the long term for your expansion of your store network of new DIY stores? So can we expect that especially in the long term, you will be opening DIY stores abroad outside of Germany, where you're not facing such a strong competition as you are in Germany.

That makes sense. Let me take this question. Now you asked. What about those competitors outside of the DIY stores doing promotional campaigns. Of course, each mosquito creates itchy skin, but why doesn't this irritate us that strongly? We are true DIY specialists. So we are not a DIY store, attracting customers who want to just buy maybe a drill machine or whatever. But they want to refurbish the entire bathroom say. They don't just want to buy a drilling machine. And therefore, they wouldn't just go to Lidle, for example, if they wanted to refurbish their bathroom, they would still come to us.

So in the consumer goods area in retail discounters are always trying to do some cherry picking of the various competitors. And certainly, the Lidle and others are making certain sales, but that's not really attracting our core clients. Our core clients want to entire projects in their home. And that's why we're not really affected all that much by those campaigns. It might well be that if there's a strong promotional campaign that we might notice it slightly. But to be quite honest, you simply have to live with that and just not worry too much because what our clients are looking for is more than just one article, they want to implement projects.

Then 75% done abroad and expansion is opportunities is your second question. I've been around and in charge for expansion for a couple of years in our management board at the Baumarkt AG. Now one thing is the top-down view. The other one is the bottom-up view. What I've learned is that it's always the bottom-up view which counts. So the question as to what opportunities arise to open up a new DIY store. In Germany, across the whole of Germany, we don't have a single HORNBACH store in Mecklenburg Pomerania in Eastern Germany, East of Berlin. And if we want to reach each and every German there would still be room for improvement in Germany, but much more difficult in terms of the competition density and also in terms of the permits and approvals. Romanians, for example, are much easier to grant a construction permit than Germans, which is why in Romania, we've opened quite a few stores and intend to open more which we have in the pipeline.

And in the Netherlands, for example, which has the strongest dynamic development for us we have opportunities there. And as soon as they will come up, we will certainly use those in a targeted way. Why? Because in the Netherlands, we are in situation where we offer an advantage in the competition environment because they're not big-sized DIY stores. So you take a look at the various situations in the individual countries and you try to use opportunities. But in each and every country, you have to be present in the number of locations, which are reasonable and make sense for the given country, from the point of view of customer supply and being close to consumers. So it's always a very reasonable mix of assessment where in a very targeted way you ask yourselves, what makes sense, what doesn't make sense. We've got a so-called expansion committee that meets every other week and assesses exactly that. And these colleagues assess where we've got the best opportunities to make progress.

Thank you very much who's got the next question question. More questions here in the room.

Thomas Maul, DZ Bank. I have a question concerning You said that this was to begin in summer or autumn, what is your plan? When will the stores be ready for selling? When will you start selling? You will start construction in summer or autumn?

Well, we are not so familiar with construction times in a new country that we are not so familiar with. We assume that we will take 1 year or 1.5 or maybe even 2 years until we can open the store. So we believe that in late 2027 or spring '28, we will be able to open our first store in Serbia.

Sounds good. I have a question from our chat that I'm going to read out here. Christian Bruns from Montega. I would like to know about the EBIT guidance. He writes, I'm worried about the pressure on trade margins and retail margins and the logistics prices and commodity price increases due to the Iran war. Will your corridor still be attainable?

Well, the question is, will our retail margin shrink in the first place and what will happen in the market. If we in trouble. I assume others will get into even bigger trouble. Of course, sales prices will go up if purchase prices go up, and this has been clearly observable in the food retail sector. So what will be the actual pressure on the retail margin? We have to look at both the purchasing side and the sales price side. And I trust our merchandising colleagues that they will have a healthy view on this matter.

The other question is, if, for instance, we had higher purchase prices and maintain the same sales price, but thereby, we would remain more affordable than our competitors who are forced to raise their sales prices. The customers will come flowing to us, and that would in turn increase our sales and the overall margin in euros. So it's not just a percentage figure, it's also an absolute figure in terms of euros. So this is part of the crystal ball experience. This is what we will experience in the next months. We will, of course, act according to what we see happen and we assume we are quite confident that we will be successful in doing so.

Any more questions in the audience on site? I can't see any further questions in the chat. Doesn't seem to be the case. So I would like to thank you very much for your participation in the analyst and investor conference 2026. And you can see the upcoming conferences we will participate in, so we may actually meet at a Capital Market Day in the next few weeks. And if in the follow-up to this event or later on, you have any questions, please turn to the Investor Relations team, and we will do our best to help you. Enjoy the rest of this beautiful day, and thank you very much for your attention.

Good afternoon, everybody. We are down to the last presentation, the 11th presentation of our German Select Conference. And the slot goes, last but not least, to HORNBACH Holding, which will be presented by Antje Kelbert, Head of IR. As always, we'll have a 30-minute slot, 20 minutes roughly a presentation, 10 minutes Q&A. If you have questions in the presentations before, please use the chat box to enter them and we will address them during the following Q&A after the presentation. And in case you did like this format, please feel free to join us on April 23 for our Austrian Select Conference. We will share the link to that shortly in the chat box as well.

That's all I have, and I will now hand it over to you, Antje, to share your insights on HORNBACH Holding.

Well, thank you very much for your kind introduction, and good afternoon, ladies and gentlemen. It's a pleasure to welcome you today here and to present HORNBACH Holding to you. So HORNBACH is a company characterized by resilient business model, sustainable growth prospects and continuous innovation.

As said, my name is Antje Kelbert, and I'm Head of Investor Relations. So here's some disclaimer remarks, but now jumping directly, what are we doing and who are we? HORNBACH is one of European's leading brand when it comes to home improvement and the DIY sector. And many of you, I'm probably sure, are already familiar with HORNBACH, whether through your own projects you've made or also our marketing and advertising activities.

In the capital market, we are active and operating as HORNBACH Holding and are listed in the SDAX. We are dividend payers and a very consistent one. Since our IPO in 1987, so nearly 40 years, we've never suspended or reduced our dividend, and this is a strong statement and a very well track record.

Our largest subsidiary and operating subsidiary is HORNBACH Baumarkt AG and HORNBACH Baumarkt AG is what you know from all our 176 stores throughout European countries. We have in 9 European countries, different locations, and we are also complemented those with our online presence and our web shops.

Our offering is complemented by HORNBACH Baustoff Union. This is a small part of the group, roughly 5% of our group sales. And this caters for new construction industry, mainly for professional customers. So it's a mergers traders business. Over the recent years, we have continuously increased our market share. You see here a small snapshot on our map. And this clearly underlines that we were able to strengthen our business and our competitive position in all the countries where we are operating.

In the past fiscal year that, by the way, we have a broken fiscal year ended February 2026, we generated consolidated sales of EUR 6.4 billion and approximately half of this revenue was generated outside of Germany, so you can really consider us as a European player. Adjusted EBIT amounted to roughly EUR 265 million and international operations contributed 2/3 of this result. What differentiates HORNBACH from other DIY retailers?

So our strong focus is definitely the project. So all projects related to your home, to garden, balcony, your living, we are ambitious to be the best partner when it comes to project realization, and we want to support our customers to support in these projects. We consistently align our offering around the needs of a customer with focus on projects. This includes both customer types. So on the one hand, the retail customers that we cater as well as the professional clients, and you see it on the graph on the right-hand side, roughly 20% of our clients come from the professional side.

So our customers focus on project execution, as already said. And this means to have the right products in the right quantity and to meet also their budget. And this is how we are structured to cater for all those needs. This means we have comprehensive services. We have efficient purchasing processes, and we can also include expert advice.

Our stores offer a deep and broad assortment. And as we have the real big boxes we are providing, we have the availability of really big volumes of products available at once without preordering in advance. We operate an industry-leading online platform. So we also enable the customer to design its journey like he wants, online, offline.

A key differentiator is definitively when it comes to our everyday low price policy, which we are very strict on and this helps the customer to be sure that he has chosen the partner that always has the best price. So we are price leaders in all our regions where we are operating. And we also deliberately refrain from promotional discounting. And instead, we have every day the low price at the moment a customer wants to realize a project with us.

Our projects and our whole processes are designed to ensure a very seamless, fast and convenient shopping event for our customer so that they are able to quickly return to their project and their project execution. An example for this is we have drive-in facilities where you can directly take your car, go into this drive-in facility, buy heavy bulky things, put it in the trunk of the car and off you go. So this is what our customers really like because it's very efficient.

Our offering is further complemented by dedicated professional services, tool rental, financing solutions and also repair services. I've already mentioned our online offering. And you see here an overview of our key topics on that. Our online offering is part of the whole business. So we call it interconnected retail. So this is a deeply integration of our online channels in the whole business. So it's really a seamless customer journey and the customer can seamlessly move also during one purchasing event from online to offline. So we support click and collect. We have direct deliveries, whatever is helping the customer to design his shopping experience with us.

So he can, for instance, start in a physical store or even he plans everything online at home on his sofa. We have configurators. So he can prepare his shopping basket. And then when he sees, okay, this is a really big amount and perhaps a professional should have a look, then he could go to the store around and could say, okay, let's discuss is this the right product, the right glue, the right tile in order to optimize that, then he can purchase everything, take it from the store or get it delivered at home. And if he has ordered some tiles, which he does not need, then he can also, for sure, bring it back to the store.

So it's always a shift between online and offline, and we enable that this is a seamless way of shopping. In total, we have 4.3 million customer accounts and the customer account is very important because when he has a customer account with us, and a price is reduced, then he automatically up to 30 days after his purchase, get a refund on his customer account, which he can use for the next purchase with us.

In total, we have more than 350 million visits, clicks on our website and our web shop. And a lot of different surveys underline that our customers are very happy with our online offering. So we have a very good ranking and rating, which is underlining a very high customer satisfaction.

When it comes to efficiency, we have this chart on the left-hand side, and this is showing the sales per square meter. So the first message is you see compared to our other German competitors, HORNBACH is operating the largest store. So the average store square meters, we are key and also the sales per square meter is something which is we are really proud because it shows that we are efficiently running our business.

So you see we have also in the last year, we have even increased once again to EUR 2,900 per square meter, which is a plus of 1.9% compared to the previous year. So this is a very efficient thing to run these big boxes, and it underlines that we know what we are doing, and we are having the right focus. What is helping here is that we have very good locations that people can easily come to us. We have good parking slots. We have also the online offering. And altogether with our good assortment, the availability and also the advice our experienced customer store staff can give to our customers. This all is showing that we are ahead of the industry.

On the right-hand side, you see a long-term graph that shows the development and the growth of HORNBACH compared to German GDP and also to our German competitors. So also here, we feel very comfortable with our positioning, and it underlines that we are doing the right things. And here, we show that we are very successful in expanding our business. This is what we did in the last fiscal year.

So we had some new openings in Romania, in Austria and also in Germany. And we added around 70,000 square meters of new retail space for our customers and for their dreams and their projects to come through. With this expansion, we are welcoming also 400 new colleagues because, as already said, these stores are really big. And this also means that adding a new store means also adding a small enterprise from the people we are onboarding for such an opening.

And these latest successful openings are part of HORNBACH impressive overall track record of organic growth. Not going to deep into detail, but this is the growth path over the company history, where we started to increase the footprint in Germany and then followed the extensive European expansion over a couple of years. And the last country we are now going to expand to is Serbia, where we will see also new store openings probably by the end of 2027.

How do we proceed? So first of all, we identify markets and countries with significant potential for DIY business. So people must be very open to do things by themselves. Then we secure attractive locations. As said, location is key when it comes to retail so that the customer can also come to you. And as a next step, we build a clear network of state-of-the-art DIY stores to broaden our footprint in the respective country. And this strategy has not only made us successful in the past, we are strong believers that this will also function in the future, and we will conduct the same strategy when it comes to getting into the Serbian market.

So we see that the Serbian market is offering an attractive growth potential for us. And this is also because of the general competitive situation we see there because the big box players are probably not there. And we see a good potential to secure market share in that area. As said, earliest by the end of 2027, we will see this first store opening. And in total, we will see a potential for roughly 6 stores in that large catchment areas in Serbian urban centers.

We have already secured the first locations, and we will now continuously roll out and proceed to enter the market. And we will not only enter the market by our big boxes, but also will establish an online shop for sure, as we have in each and every of our countries and also roll out our interconnected retail strategy.

What is the general growth tendency where we are established? And I think probably it's very clear. One of ones is the focus on your own home, especially in times where it is uncertain, where there are a lot of wars, geopolitical uncertainty, macro uncertainty, people tend to focus on that area of their life that they definitively can influence by themselves. For instance, the house, their garden. This is the area where they can do something with their hands and they can also like a kind of a therapy come out of this multiple crisis mode by, for instance, going to the garden and doing something outside. So this is very important for our customers.

The next thing is when it comes to energy refurbishment, please keep in mind that we have a really old housing stock throughout Europe and throughout all the countries where we are operating. So they not need a general refurbishment, but in particular, energy refurbishment projects. So we are also well positioned to participate from this trend.

Last but not least, you have also an aging society. Aging society means you have to adapt your living area because you want to stay there even if you turn older. And you need, for instance, a walk-in shower and you have to restructure your bathroom, and this is also something where we can support our customers to do so to get barrier-free renovations.

And the last thing is also trade people. There's a scarcity of trades person in Europe, in general, in Germany. So we try to enable our customers to do things on their own. So we have tutorials on our website. We have good advice in the stores to enable our customers to do things by themselves and also to save cost because also people have restrained budgets and doing it on their own is not as expensive as doing it from a professional customer.

As already mentioned, we have a lot of selling space and roughly 62% of this selling space is in our own hands, which this graph is showing. This is very helpful because it gives us a lot of flexibility to change things, for instance, to add the already mentioned drive-in facility for construction material for large, heavy and bulky things where we can just erect that directly attached to the market. And it gives us a higher flexibility to expand and adapt our own sites.

At the same time, it's also kind of a finance reserve we have in the country -- in the different countries. And it's also true for all of the countries where we operate, partly we have rented sites and partly we have own sites in our own hands.

Let us now look at the latest figures. We have not disclosed the full set of numbers yet, but we had also already given some information on our trading statement in March. We come to this here. There you see that we were able to successfully conclude the fiscal year 2025, '26 within our guided ranges. So this is something we are really proud because we were able to show a good growth, a good development despite a really challenging environment. And you probably know it's not so easy, and we're really happy with the numbers we were able to disclose to the market already. The rest of the numbers will disclose on the 19th of May with our annual conference, and there we give more details, including a guidance for next fiscal year.

Just to guide you here, I already mentioned the development of net sales for the full year, plus 3.8% what is also important to see is that the like-for-like sales growth. So this means if you only consider the stores that already have been in our group 12 months before, we achieved a growth of 2.4% here. And if you consider the industry, they did not -- were able to show such a good development. The gross margin, as already indicated, remains on a strong level. And the adjusted EBIT was a little bit below last year. So not all of the cost increases got fully compensated, but the good gross profit was able to compensate a lot of cost increase.

So all in all, we were really happy with the successful conclusion of the fiscal year. Also looking a little bit ahead, as I said, we have no official guidance currently. We will have that in a month of time. But looking ahead, we will stick to our core USPs, as said, the price leadership, and we want to be a reliable project partner for our customers. We want to further expand our strong market positions. We want to further increase the market share in the different countries. And we will also, for sure, look on efficiency, look on cost management and the world around us will not get easier. So we also have to be efficient. We have to look where we can use AI and digitization to compensate cost management and better manage our inventories.

You always know we have already issued ESG reporting. We will do that also with our annual report in May again. And all those targets are also incorporated in our compensation of the Board, and it's really a very important thing to look on ESG criteria at HORNBACH.

Yes, last but not least, we will maintain a strong balance sheet, and we will stick to our attractive dividend policy. So never reduced or skipped the dividend. And also going forward, we will stick to our dividend policy to be at least at the level of the previous year. And all further details will then be disclosed with the invitation for the AGM.

I think I'm pretty much in line with our timing and now open to your questions.

Very good. Thank you so much, Antje. We do have a few questions already lined up. Let me start out with the first question, which is regarding the EBIT margin and the EBIT margin development. We've seen EBIT margin peak in the COVID time in era. Since then, it's been hovering around 4.5%, give or take. Do you see any initiatives or any growth that might drive that margin higher? I mean we see top line growth, but there really hasn't been much leverage on the margin? Or is this a business that will stay around 4.5%.

I think the COVID years have been really outstanding. So this were really outstanding years for our business development. It was kind of a skyrocketing and also reflected in the EBIT because our net sales rose tremendously, and we normally would need more people to handle that. And during the pandemic, it was not able to onboard them. So there was a little bit of mismatch of development of this.

Yes, later in time, we had more pressure, especially during the times of inflation when also the demand for wage increases for sure, was there, and we have experienced a lot of increases in wage. Also last year, we have seen some further wage increases, but also, as I said, onboarded new colleagues, which also increased our staff and our personnel costs. Personnel costs by far are the biggest block of costs we are confronted with.

And for sure, as I said, we want to be as efficient with our people as possible, especially in the stores where we can help our store staff to lift some work from them, for instance, the disposition of articles and so on where we could use in future more AI, where we could better and more optimal guide our inventories and to free them from logistic tasks to focus purely on our customers. And I think this is something where we really have some initiatives and also in our offices and in the administration, we want to be more efficient. I think there are some things we can do. But in general, people are important to HORNBACH because, as you know, you come to a DIY store and no one is there. I think this is key for generating our revenue.

Regarding your low price strategy, which is, of course, a unique differentiator and I guess, also helps getting people into your stores. How do you view that strategy in an environment of rising prices and higher inflation? Because on the one hand, competitors are, of course, increasing their prices and you might leave some money on the table, especially in that inflationary environment. How do you view that? Or do you have any experience with that?

Yes, we have. We had times after the COVID pandemic where due to this energy price rise we have seen during the time of the start of the war in Ukraine and this scarcity of gas and all those discussions, we had also seen a high inflation. And also during that time, we have experienced the pressure that is causing to the price leader. And if you take into consideration how we are doing the pricing, it's not kind of a cost plus pricing. It's that we really scan the market. We look where is the price scheme, and we try to position us on the low end of this price scheme.

So for sure, if the general price level is going up, also our price level is going up. But we are not in the driving seats of driving the general prices according to our everyday low price policy for sure. This is a logical consequence. And yes, it gives some burden but we also benefit in normal times very much, and we consider that really as an asset because people come to us and not losing top line is also a very, very important thing because that directly helps us to increase our gross profit.

I'm sure this is a question that is asked more frequently regarding your real estate portfolio. Is this something that you will keep going forward? Or is it something where you could imagine sale and leaseback and maybe monetize that more efficiently?

Yes, sure. As already presented, we have currently 62% of our selling expenses in our own hands. The strategy is to have roughly 50%. So we are a little bit over that. We could imagine to do something like that. It's, I think, part of the general toolbox our CFO could consider to use. And also in former times, this has been used already from the company. So it's something if it makes sense and if there's an opportunity, we would do it. Just also from the idea why we are renting the one location and we are buying the other. I think to keep into mind is important in retail to have the right location that very much fits into your existing portfolio is important.

So a certain location to have it, this is the key decision. And if this area is up for rent or for sale, this is the next thing we are deciding. So first of all, we want to make use out of this area, and we want to make use by operating a large DIY store, and this is important. What you could do and this freedom, as I said, it's kind of a finance reserve. We also had, yes, we could imagine to do that, but this is part of the general financing functions we could use.

You talked about online sales, store sales and the combination of the 2. Can you give us a little bit more feeling as to what the split is? And the question actually read, what is the average transaction value of a customer who engages digitally before or during a store visit versus one who doesn't?

Yes. So we have not a concrete number who's really doing some research in advance or not. We only know that it is nearly each and every customer is already starting the buying process by using online offerings by doing some research, by looking up availabilities in our app and things like that, also looking at editorial. It's an important thing. And nowadays, you say, if you are not online than you're not offline. So the connect is really strong.

And we are not really breaking that out because, as I said, interconnected retail is the whole bundle of our offering and the whole customer journey. To give you a broad number, we have roughly 13% of our sales is generated from the online world, so from our e-commerce, and this has also compared to last year, increased by 7%. So we are happy to do so. But we have also not a target to reach 15%, 20% or so because this would not go along this freedom we want to give to our customer to design its customer journey as best as it pleases them.

Makes sense. I do have one more question, which was asked regarding the competitive environment. And you've already touched on that because you are focusing more on the high-end customer in the retail and the professional sector. But the question is wondering if the discounters like Lidl and Aldi with their brands like Parkside, for example, are cutting into your territory or if you were to say this is a completely different market segment that they're catering to, and we don't feel it and we don't worry about it.

Yes, it's something you clearly -- you always have to have a close look at the market and the market development, and you should also never underestimate your competitor. I think this is also in trading a very important thing. However, as we are more focused on the whole project and the project is always a combination of different things, material of tools and so on, we see ourselves well positioned to participate from the overall growth trend. But yes, for sure, they have different offerings as well, and we have to keep an eye on that for sure.

Great. Thank you so much. We're out of questions. I do have 2 or 3 housekeeping issues that I quickly want to raise before we part. First of all, thank you, everybody, for attending this presentation or potentially some more during our conference today. We will have recordings of the individual presentations available on Research Hub a little later today. So in case you missed one, feel free to look it up on Research Hub.

We will send out and already have questionnaires for you to give some feedback to the presenting companies. We very much appreciate if you take a second and fill it out. It's very quickly done, 6 questions, and that will be very helpful for the companies to evaluate their performance. And last but not least, if you enjoyed what you saw today, feel free to join us for the Austrian Select on the 23rd of April, I posted the link in the chat box just a little while ago.

With all this in mind, thanks again from my side. Thanks to you, Antje. And if you have final comment, there you go. Anything else?

So yes, I all invite you to do your own gardening project currently because it's spring season. And I think our colleagues have a lot of good ideas how you could bring some flowers, some spring to your own life and garden, and I hope to see you soon in one of our stores.

Great final remarks. Thank you so much, Antje. Thank you, everybody else. Have a great afternoon and a great evening, and see you soon. Bye.

Thank you. Bye-bye.

Good morning, and welcome to our Q3 and 9-month update call for HORNBACH Holding. My name is Antje Kelbert, Head of Investor Relations. Earlier today, at 7:00 a.m., we published our financial results for the first 9 months of fiscal year 2025-'26, covering the period from 1st of March until the end of November 2025. During today's call, we would like to give you additional insight into our final financial figures following our pre-release on 5th of December. I extend my warmest welcome to our CFO, Dr. Joanna Kowalska, who will be your host today, presenting our latest set of numbers. After the presentation, we will take your questions. Please note that this conference call, including the Q&A session will be recorded and made available along with a transcript on our company website.

Kindly also take note of the disclaimer, which applies to the entire presentation and the Q&A session. [Operator Instructions].

With that, I'm delighted to hand over to Joanna to walk us through the key developments of our first 9 months of this year. Over to you, Joanna.

Good morning, everyone, and thank you, Antje, for the kind introduction and warm welcome. It's a pleasure to be here again talking to you about our results. Before we get to the details, I'd just like to take a moment to talk about the context of the macro environment and retail background to these quarterly figures. Customer sentiment has been dense all year, especially in Germany, but also in other regions. At times, GDP growth rates and expectations remain moderate to low. And against this backdrop, we have stayed focused on creating value for our shareholders. Overall, we believe the last 9 months has been positive against the challenging customer environment I have outlined.

So to the results, which I'm sure you have all seen, HORNBACH Group net sales reached EUR 5.1 billion, an increase of 3.8% from last year. Our Baumarkt subgroup grew sales by 4%, gaining market share in Germany and across Europe. This was driven by higher customer footfall. We continue to outperform the DIY sector in terms of like-for-like sales growth. The DIY sector in Germany saw significantly weaker figures from January to November compared to our results. This is based on data of the industry association, BHB. Additional market research data proved that also in other countries, we at least match or beat the overall sector performance. We opened 4 new stores and continue to invest in future growth. We remain committed to our expansion plans. And as a consequence, higher CapEx is reflected in our free cash flow. Gross profit increased by 4.1% or EUR 72 million. This resulted in a stable gross margin of 34.7%. Adjusted EBIT for 9 months was about EUR 300 million, matching last year's level.

And now let's have a look at our Q3 performance. Here, net sales increased by 2.2%, and we were hoping for a stronger top line and consequently a higher quarterly result. However, against the current environment with subdued customer sentiment, we managed to outperform the DIY industry also in Q3. Once again, it helped us gain market share. While we achieved top line growth and maintain a satisfying gross margin, we are not able to fully offset increased costs and thus, adjusted EBIT came in EUR 7.3 million below last year's numbers. Looking at the remainder of this year, the full-year outlook remains unchanged, and we expect adjusted EBIT to be at the level of the previous year.

Before we dive deeper into financials, let me highlight some operational achievements which underline our strategy to deliver organic growth. Looking back at the past 9 months, we have achieved remarkable expansion progress. We opened 4 new stores, representing around 70,000 square meters of selling space. In March, we enlarged our German store network. Our great flagship store in Duisburg showcases state-of-the-art home improvement retail. Over the course of the third quarter, we continued our international expansion and opened 3 new mega stores, 2 in Romania and 1 in Austria. In addition, there has been the opening of the new specialist store in November. We transformed an existing HORNBACH store in Mainz-Kastel in Germany into BODENHAUS concept. Located at the prime location, the third BODENHAUS store offered an outstanding selection of hard flooring products to our customers.

Our expansion comes along with 400 new colleagues in these stores and being a big box player, additional stores are also related with an uptick in inventory. I will refer to the increase of personnel and other costs later in the presentation. These recent openings are part of HORNBACH's strong track record of organic growth. As you might already know, we have entered a new market in Serbia. Before we go into those details, let's have a look at our consistent expansion. Starting in 1968, we opened the first integrated DIY store in West Germany. Besides entering former East Germany, we also grew international expansion and laid the foundation of today's European footprint. Between 1996 and 2007, 8 countries throughout Europe became HORNBACH region. After that, we rolled out our online shops in all regions.

We have always been willing to take bold steps and innovate while honoring our tradition. Our approach is clear. First, we identify markets with strong home improvement potential. Then we secure attractive location with synergy potential and large catchment area. And finally, we build a network of project-oriented DIY stores and online shops. This strategy has made us successful in the past, and we believe that is our recipe for the success also in the future. And by entering Serbia, we aim to unlock attractive growth opportunities.

The Serbia DIY market has similar characteristics to our existing market and provides us with good opportunities for growth. Our proven strategy will guide us. Clear focus on large state-of-the-art DIY stores with a project-based approach. We see here potential for 6 to 8 large store formats. And as you see on the slide, we believe the country offers excellent conditions for our concepts. This creates an opportunity for us to gain significant market share. We have already secured attractive locations. And for each location, we plan to invest between EUR 25 million and EUR 40 million. We expect the first store to open no earlier than the end of 2027. We are very excited to follow our expansion path and continue our success story in this new HORNBACH region.

And now let us have a look at the recent figures for the reporting period. As already mentioned, group sales rose by 3.8% in the first 9 months. This was supported by a strong spring, a solid summer and followed by a mixed third quarter. The HORNBACH Baumarkt subgroup grew by 4%. Germany delivered 2.1% growth, while international operation achieved 5.8%. Customer frequency increased by 2.8%, and the average ticket also saw a slight rise. As you can see, after 2 years of weaker sales development, we have now returned to growth. Considering the challenging customer climate and weak industry trends, we are pleased with this result.

Let's briefly review the HORNBACH Baustoff Union, our subgroup focused on professional construction customers. Here, as you can see, sales declined slightly by 1.4%. However, we believe the construction sector in Germany will pick up again next year. Recent official statistics show a modest improvement in order intake and building permits. How is the regional split of our sales? More than half of the sales now come from the European countries outside Germany. This represents an increase of about 1 percentage point year-on-year.

Let's now have a look at like-for-like sales development. So for the first 9 months, like-for-like sales rose by 2.6%, exceeding last year's results. Germany recorded 0.7% growth. Here, we outperformed the German DIY sector in every single month. Other European countries grew 4.3% on a like-for-like basis. The Netherlands and Sweden were strong with nearly 10% and 4% growth, respectively. Q3, on the other hand, showed a mixed performance. Regions such as Netherlands, Sweden, Switzerland and Luxembourg have remained on a growth path. Other regions faced challenges. This includes, for example, extreme weather conditions or purchasing power decreases. Group-wide, we have seen a calendar effect of roughly 1 business day less in the last 9 months. In Q3, there were no differences in business days. Overall, we were mostly matching or even outperforming the DIY sector as confirmed by BHB and GfK data.

Moving on to market share. We are focused on strengthening our position across Europe. Throughout the year, we expanded our footprint in all HORNBACH countries with available market share data. Let's have a look at the map. In Germany, our largest market, our share rose to 15.7%, up 0.6 percentage points from last year, a great result in a highly competitive market. In the Netherlands, positive footfall helped to bring our market share to 29.1%. In Czechia, we increased our market share to almost 40%, maintaining strong momentum. Also, Austria and Switzerland also experienced growth, a strong track record that underlines our position and strategy. With our assortment competency, outstanding prices and service offerings, we can best serve our customers. And a big thank you to all our colleagues on the sales floor who help make this happen.

And now to our e-commerce business, which again performed well. Customer engagement on our integrated platforms continues to grow. This confirms their status as established key sales channels. E-commerce accounted for 12.9% of total sales in the last 9 months and is growing. Sales rose by 8.1%, driven by strong growth in the first 6 months and a solid performance in Q3. Both Direct delivery and Click & Collect grew by about 8% each.

Let's now have a look at our P&L. Gross margin was slightly higher than last year and amounted to 34.7%. Our gross margin rose by 4.1%, slightly ahead of the net sales growth of 3.8%. This was supported by a profitable product mix and innovative assortment and positive purchase price effects.

Let us now turn to expenses development. As you can see on the right side of the slide, selling and store expenses rose in absolute terms, but the expense ratio was nearly stable despite higher wages and new stores. Preopening costs increased by EUR 6 million due to our expansion activities. We also worked on our IT infrastructure, which resulted in higher costs. This is important for future proofing the business. Our efforts will contribute to overall efficiency and improved working capital management. It's also reflected in our general and administrative expenses. They went up by 0.2 percentage points as a share of sales, mainly due to wage increases and IT improvements.

Personnel costs for the first 9 months totaled EUR 871 million, an increase of 4.9%. This increase was in line with our expectations and driven by wage increases, but also staff for new stores. We partially mitigated this cost increase by adjusting headcount in our current store base. In Q3, personnel costs rose by around 3% as expected and communicated during our half year call. For Q4, we expect a similar development. All these factors led to a stable development of our adjusted EBIT, which we will see on the next slide.

Adjusted EBIT after 9 months was at last year's level. As you may know, we had a very strong spring season and therefore, excellent results in Q1. Q2 was solid, but influenced by an increase of personnel costs. In Q3, the gross profit growth did not fully offset higher costs. Therefore, adjusted EBIT was about EUR 7 million below the prior year's quarter. As you can see on the right side of the slide, countries outside Germany delivered 68% of adjusted EBIT, a 5 percentage point increase year-over-year. There were no significant nonoperating items or adjustments in the first 9 months of 2025. So we maintain our original guidance for the full year adjusted EBIT to be on the last year level.

Now let's review the cash flow statement. Operating cash flow increased year-on-year. This was mainly driven by lower cash outflow from working capital. We reduced the use of our reverse factoring program. Funds from operations remained steady compared to last year. Capital expenditure reached EUR 167 million, up from EUR 107 million last year. This reflects our strong commitment to organic growth. 57% of CapEx was invested in land and real estate, mainly for the new store development. The rest went into store conversions, equipment and software. Free cash flow after net CapEx and dividend came in at EUR 105 million, down from EUR 150 million last year, which reflects our consistent ongoing investments in expansion.

So let's move on to the balance sheet, which is still strong. Total assets remained steady at EUR 4.6 billion compared to the year-end results in February. I would just like to share some comments on liabilities. In September, new promissory note loans were issued at the holding level. This replaced existing loans of Baumarkt level. The equity ratio rose to 47.1%, highlighting our solid financial standing. Net financial debt was lower than in February. As a result, the net financial debt-to-EBITDA ratio improved to x 2.5. Our balance sheet figures demonstrate the strength of our financial base and the resilience of our business model.

Let us now have a look at our guidance. We confirm our guidance issued in May 2025. We continue to expect net sales to be at or slightly above the level of 2024-'25. Adjusted EBIT is expected to remain at the previous year's level. Reflecting our ongoing expansion strategy, we expect CapEx to reach up to EUR 230 million for this year. So solid growth, increased market share and stable EBIT despite the challenging conditions.

And before moving to Q&A, I would just like to emphasize the long-term opportunities we see for HORNBACH. We are committed to price leadership and being a trusted partner for our customers. We're also committed to target investment in expansion and efficiency to help us maintain and grow our leading market positions in Europe. Therefore, we stay focused on creating value for our shareholders. And despite economic challenges, we see medium- and long-term growth opportunities in home improvement. We are pleased with the results in the first 9 months of the year, and I would like to thank all our teams who have made this achievement possible.

So thank you, Joanna. [Operator Instructions]. I now hand over to Elba, our operator, to explain the technicalities of our Q&A session. Please go ahead.

[Operator Instructions] Our first question comes from Ben Thielmann from Berenberg.

This is Ben from Berenberg. Can you hear me?

Ben, we can hear you.

Okay. Perfect. Maybe one question from my side on the like-for-like growth you guys have seen in Europe, excluding Germany. I mean the first 9 months in Q3 was pretty strong. I mean, you grew by 1.3% in Q3. Last year, you did 3.5% already like-for-like. I was just wondering, can you give us some color what regions in Europe, excluding Germany, did particularly well? I remember that historically, Romania was particularly strong. Is there any big difference between the countries? Maybe some color what regions drove the growth in the first 9 months or in Q3?

Okay. Thank you, Ben, for your question. I'm happy to answer. So as you mentioned, we had some decreases in the Q3 in some countries. It was Romania. And we had there some budgetary adjustments in Romania, which affected the purchase power of the consumers. This was the reason why we had not so good performance in Romania in Q3. Nevertheless, it was really a temporary effect. It was just 1 quarter, and we are happy with the overall development in the 9 months, because we have then already increased our sales like-for-like in 9 months by 1.9%.

Also other countries, as you can see on our slide, yes, with the like-for-like sales performance, you see Czech with 3.2%, yes. This was really also a onetime effect just in comparison to the last year, because in September 2024, we have flood in Czechia, which impacted our sales last year. And now, of course, we are happy that we have no flood in the country. But of course, it had impact on our sales in this quarter. Nevertheless, also Czechia, we are very satisfied with the development in the country. And as you can see, in the 9-month period, also Czechia is growing sales. And comparing also to the competitors, we increased our market share and the customers trust us.

Okay. Perfect. And maybe one more question, if I may, would be on competitive landscape in Germany. I'm reading a lot about one of your competitors, the CEO had a newspaper statement 2 weeks ago, they're expanding a lot via new markets. You guys are opening 4 markets. But then I see one of your competitor, Hellweg, which is publicly disclosed, is closing roughly 20 stores in '25 and '26.

And I was just wondering, is there any chance that this could be a positive tailwind for you guys? I mean the customers that usually go into those stores, the demand is not gone, they need to go into different stores when they are closing down. And I understand that the locations of your competitor stores are not necessarily the right location for you guys. But I was wondering, do you expect any positive market share development from your competitors further consolidating in the next 12 months? Is there maybe even a chance that you would take over some of their markets? I know you did it with Praktiker back then when they went bankrupt, which was a special situation, but any color on this dynamic would be very helpful.

Thank you, Ben, for your question. And it's a good one. Of course, we are tracking developments in our competitive landscape based on public knowledge and media coverage, of course. And as you mentioned, there are 2 issues on that. So we are always looking at opportunities to expand our store network. Also in Germany, we see chances there, especially because of the current market situation. But to be honest, currently, we are focusing on our expansion strategy. And as I explained during my presentation, we are willing to expand. Whether it will come from Hellweg or other, we have no plans at the moment. But nevertheless, we're continuously expanding and looking for the right locations.

The second issue what you have mentioned today was the sales, which we can maybe use for us. And here, it's very difficult to judge. But obviously, we could take over somehow the sales and the customers. And we hope we will double, especially in the regions where we are not -- we have some white spots and -- yes, we hope. And movements in the market may also provide opportunities. And also our online store, which is growing and the customer trusts us. I hope, yes, we will try to use the opportunities.

Okay. Perfect. I have a few more questions, but I'm going back into the line and giving some time for my colleagues.

The next question comes from Volker Bosse from Baader Bank.

I would have 2 questions, and I would like to start with Serbia, the new expansion country. If I got it right, for clarification, you said 6 to 8 stores is the potential which you see for your format in Serbia with the first store opening then in '27. How many store locations do you have already secured? You said something in the call, but I did not get it right, but perhaps you add that one by one?

Volker, thank you for the question. Serbia, we are happy about our entering in this market. We are highly optimistic about the prospect for the strong business development in Serbia and primarily for the reasons outlined in our presentation. And coming back to your questions, as I mentioned, we plan with 6 to 8 locations there. What we secured already now are 3, 4 stores at the moment. We see the potential is for 6 to 8, because it's really a great country with, yes, a lot of opportunities for us. And as you saw in my presentation, yes, there are really, yes, good chances for us, especially homeownership.

This brings me to the second question and a bit of outlook to '26. Of course, it's too early to give already concrete guidance on '26. It's more a general question. I would like to ask, first of all, number of store openings we can expect. I mean, there is a kind of lead time. So you have already started the project, which will be finalized next year, obviously. And also related to '26, how do you look at the consumer sentiment for '26 in general, especially also in the light of the infrastructure program, which is about to come in Germany. Do you expect this to change the mood for the overall building industry, construction industry, but also for the private households to spend more in renovation, et cetera, inspired by the infrastructure perhaps?

We are currently still in our planning phase. Therefore, we will release guidance for the upcoming fiscal year with our annual report as we have done this in the past. So far, we have seen a good start into the fourth quarter with a positive footfall development in most regions. However, of course, 1 month may not reflect the full quarter and especially not reflect the outlook for the next year. But we are of the opinion that for the building, the pickup is expected. So we see upward trend in the building permits about 15%, which is positive, and which is really something new considering the last year's development. So the 15%, yes, it's a good basis for us. And therefore, we look positive to the next year.

Okay. The 15% was on Germany, building permits increase in Germany year-over-year?

Yes, 15% in Germany, yes.

The next question comes from Thomas Maul from DZ Bank.

I've got 2. The first one, can you provide some information on the development of average basket size and footfall in your stores in Q3? And the second question, maybe you can comment a bit on your cost development. Have you actually started any measures to limit or to cut your cost base?

Thank you, Thomas, for the question. I will start with the first one about the customer footfall. And in Q3, we have increased our footfall by 1.7%. And also, we have what we said so was the slight higher average ticket, which is very good for us, of course. And the footfall increase in 9 months was about plus 2.8%, yes. And also there, the average ticket, having in mind the 9 months, we had slight average ticket growth.

And your second question was about the cost. And I can understand where you are coming from, of course, especially having in mind our Q3 development. As I mentioned, yes, we are performing very good on the top line, and we saw the higher costs, especially in personnel costs. And of course, we always aim to reduce the costs and to manage this. But to be honest, these cost increases are in line with HORNBACH's strategy and growth agenda as well as the need to recruit and retain high-quality team members across our existing and new stores.

Nearly 60% of our costs are personnel costs and the rise in expenses reflects here 2 elements. The first one is wage increases. This ensures our employees' incomes keep pace with inflation. In Q3, it was 3%. But also, and this is important, let's remember, we had the headcount growth, which is a natural consequence of our ongoing expansion program as we open new stores. And investing in our people is key to scaling our customer reach and continuing to deliver best-in-class service at every location to be committed to striking the right balance between invest and maintaining cost discipline. And for example, you're asking for a measure and how we manage this. So our investments in IT infrastructure, including the deployment of state-of-the-art software solution and AI are designated to unlock meaningful efficiency gains going forward. Of course, there is no directly impact in the next months. But nevertheless, our investments in this area will bring us bigger efficiency gains in the future. So the cost discipline is always our priority.

The next question comes from Miro Zuzak from JMS Invest.

It's Miro from JMS Invest. I have a question regarding the store openings, the envisaged ones in Serbia. You mentioned EUR 25 million to EUR 40 million of CapEx per store. I understood if you want to open 7 to 8 stores in the upcoming future, can you please give us some picture on the CapEx level that we should put in our models then going forward, the annual CapEx figure? Would that go up?

Miro, thank you for the question. So as you can see already now, yes, we have higher CapEx this year, which results from our expansion. And the higher CapEx, of course, reflects our investment in the future growth strategy. And until now, we have only a small portion in this year for Serbia there. And in the next years, obviously, we will have an impact from Serbia. And in the next year, we will not open the stores, but we will have the first CapEx for Serbia there.

As I mentioned, we secured 3 locations and some of the cost will be at the balance sheet already and some in the cost. As I mentioned in my presentation, we expect CapEx for each store amounting by EUR 25 million to EUR 40 million. But we have -- actually now, because of we only secured 3, 4 locations in the next years, I cannot really give you a very detailed information split for the next years.

Can you maybe -- I mean you opened 4 stores this year already, leading to a higher CapEx versus last year. Would it first go down before it goes up again? Or will it remain at these elevated levels?

So regarding the run rate CapEx, we anticipate CapEx remaining elevated in the coming years as we continue to pursue our expansion strategy. And so this is not only about Serbia, but also, yes, we will expand also in the other countries. So the CapEx will not go down in the next year. It will be higher.

Yes, Miro, you also see -- sorry, to add, so you also see things reflected in our CapEx, which is not directly converting into stores the year after or even 2 years after. There are a lot of changes in the line. You're securing your land banking things, you're looking for property. And until you start then really constructing and then it gets also in our preparation for a new store, it needs time. So there are a lot of different mixed things in our CapEx numbers that are not purely only Serbia, but in general, filling all those 5 gaps as Joanna has outlined.

Okay. And a connected question to this one, because obviously, your stock is typically what people would consider a value stock. I mean it's like very low valuation, high free cash flow yield and so on. And if you put so much capital at work, probably there rise questions about economic value added and capital efficiency. Can you please elaborate your thinking about that? What's the level of cash returns or like returns on invested capital that you require to see from allocation in your planning at least in order to give a green light for a new project? And how do you think about that? What is your thinking about capital allocation and economic value added?

Yes. So you know that on the one hand side, we stick to our dividend policy. This is one part of the allocation of our capital. We have there laid out a dividend policy. I'm pretty sure you know that we are at least on the level of last year, and we'll stick to that. And this is also part of our capital allocation. However, I think we also outlined that taking the opportunity of growth, especially entering a new market is something that does not occur each and every year. So we will have to take this opportunity. However, we are checking each and every of those locations. So you can be sure that we have calculation models that we calculate. And as a hurdle rate, we have our weighted average cost of capital that the stores should earn and contribute to the overall growth.

I think the important thing here is, of course, we expand, we invest in the new stores. And also, as you mentioned, of course, it brings the increase in inventories. But nevertheless, the important thing here is that we will continue to follow our dividend policy. So this means we will continue to pay the dividend each year at the last or on previous year's level.

Okay. I have more questions, but I'll step back in the line and maybe come back later.

The next question comes from Ben Thielmann from Berenberg.

This is Ben again. Maybe a follow-up on Miro's question on free cash flow. I was just wondering, there was a certain inventory ramp-up related to the new stores that you guys opened. And I was wondering whether you could guide us a little bit on Q4 in terms of inventory development. Was it something like a one-off effect that we have seen in the last couple of months related to the new stores, and working capital is going to normalize in Q4? And then maybe the same thing in terms of CapEx. You mentioned EUR 25 million to EUR 40 million per store. This is excluding inventories, right? These would be my 2 questions.

Thank you, Ben, for your question. I come to the last one. So it was all in, yes.

Okay.

And coming back to your first question, yes, in our inventory amount, you see the new stores. And of course, if we open 4 stores, yes, the inventories, there is a rise there.

Coming back to your question about the Q4 trend. Here, we do not open any store more. But nevertheless, we have to consider that we are preparing for the season. So the Q3 is usually connected to increase in inventories, yes, because then our spring season starts and we will build up the inventories for this season.

Okay. And then maybe one last question, if I may, and then I'm going back into the line as well. I was just wondering, has there been any significant change in customer behavior, if I split them into, let's say, retail, that's me going into the store and then the professionals. Has there been any data points that you have seen in terms of frequencies or basket sizes that are encouraging, that maybe demand for your professionals indeed is picking up next year?

Ben, so we see -- the customer footfall, as I mentioned, is increasing. And also we see the slight average ticket is growing, and both in stores and also online, which help us in the top line. Sales from professional customers has been also growing stronger, even stronger than overall sales with the strongest growth in the building materials category. And the strongest customer growth has been in property management, building renovation, electrical installation and also general construction. Pro customers represent approximately 20% of our sales. And if they are growing, yes, it brings positive effect to our overall sales in the group. What may be also important for you to know, also our installation service sales performed well. This installation services still represent a small share of our total sales, but nevertheless, they show double-digit growth, which makes us happy.

Okay. That is clear. And maybe one last question, if I may. One of your competitors, Obi, has announced that to improve the efficacies of their Click & Collect and Direct Delivery revenues, they're installing what they call electronic shelf labels, which is like an ESL, as we call it, and it's basically a digital price tag or like an automated price tag you put instead of a paper price tag. And I was wondering because if I look at the German industry, it's like you two and maybe Bauhaus that are doing particularly well in Click & Collect and in online revenues. And I was just wondering if you're doing any investments in that regard, that you're trying to fasten up delivery times? Is there anything that you have tested something like digital shelf labels as well? There are different types of store digitalization measures I read in the industry in the last 2 years. Any color on that would be very helpful.

Yes. So I can take the one on the digital shelf labels. I think we have also done some pilots on that. And we came to the conclusion that, yes, it's not -- in each and every area, we cannot bring that. We have also a lot of selling space that is outside, so very cold or wet. So for our testing, we stick to the situation we currently have. But I think this is not that directly connected with the Click & Collect, because you know that online and offline we have the same prices. So this always has been the case, and we'll manage that, yes, the whole time, even without those digital labels. And I think we have outperformed when it comes to the Click & Collect. And in our interconnected retail, we did a very good job. We showed that we have increased there now once again, and we are pretty happy on that. There are always things you can optimize in those processes. We invest in being more digital in general. We invest in being more efficient. But I think the state-of-the-art is currently very good, but there's always a job to be done and you can always improve.

The following question comes from Miro Zuzak from JMS Invest.

Just 2 quick ones. The first one regarding your adjustments. There have been very little adjustments this year so far like last year. In last year, in Q4, the adjustments were around EUR 17 million. From today's perspective, as we are already now in the fourth quarter, probably you have more visibility on that. What is the level of adjustments that we should envisage for the current year?

So the adjustments are non-operative effects from non-realization of expansion projects. And they were until now there, as you mentioned, only in a very small amount. And we have, at the moment, non-operative adjustments there. But what we have to consider for the Q4 as the impairment test. As you know, at the end of the year, we have to perform the impairment test, and this is not yet done, but we do not guide the figures.

That's why we also focus on the adjusted number of the EBIT, because this is what we are adjusting in general. It's the biggest part.

Okay. And the second one would be on the minorities. Typically, they were around 3% of the adjusted Baumarkt EBIT. And in Q3, it was really 0. Was it more like -- did you change anything in the ownership? So is there any change in minorities?

No. We have -- there has been no changes.

No. No, no.

Perhaps we can take that afterwards if this is a specific thing, because I'm not quite sure what you're pointing to. But just we take it after the call, Miro. Thank you.

Yes. So I think it looks as if we have taken all the questions, and the one remaining we will take afterwards. So with that, I thank you, Joanna, for the valuable contribution today and for the call. For the new year, we have already scheduled some participation in capital market conferences, and we are hoping to see you there also in person and engage in a personal conversation with you.

In addition, we will provide an initial glimpse on our full year figures, provide with more information then in our trading state in March on the 25th of March, and all our upcoming events and dates can be found on our Investor Relations website. And yes, as usual, if anything comes up afterwards, please do not hesitate to reach us out.

So thank you very much for your interest this morning, and have a blessed Christmas season for all of you celebrating Christmas and a happy New Year. Thank you very much. Bye-bye.

Welcome to the Half Year Update call for HORNBACH Holding. My name is Antje Kelbert, Head of Investor Relations. Earlier today, at 7:00 a.m., we published our financial results for the first half of fiscal year 2025/'26, covering the period from 1st of March until the end of August 2025. I'm especially pleased to welcome our new Chief Financial Officer, Dr. Joanna Kowalska. With our deep industry expertise, and many years of experience in financial management, at KPMG and within the DIY retail sector at OBI Group. Joanna will be a great addition to the HORNBACH team. Since mid-August, she has taken over responsibility for the finance result and will be presenting today's results, guiding us through the presentation. We are also joined by CEO, Albrecht Hornbach, who has served as interim CFO during the transition period. Albrecht will be available for your questions during the Q&A session.

Please note that this conference call, including the Q&A session will be recorded and made available along with the transcript on our company website. Kindly also take note of the disclaimer, which applies to the entire presentation and the Q&A session. [Operator Instructions]

With that, I'm delighted to hand over to Joanna to walk us through the key developments and financial highlights of the first half year. Please go ahead.

Good morning, everyone. Thank you, Antje for the kind introduction and a warm welcome. I'm truly delighted to be part of the HORNBACH team and to join you for today's half year update call. Since stepping into the role of the CFO about 6 weeks ago, I have been deeply engaged in learning about the many facets of our business. It's an exciting time, and I'm grateful for the support of my colleagues, especially Albrecht, who has been instrumental in helping me during the transition process.

To HORNBACH, I bring over 17 years of experience within the European DIY retail sector alongside dedication to financial management and operational improvement. During my time at KPMG, I advised and audited many listed companies, and I'm truly delighted to contribute to HORNBACH's continued success as well as to long-term value creation for our shareholders. And I also look forward to getting to know all of you meeting with you over the coming months and continuing the open and constructive dialogue that HORNBACH is known for.

And now let's dive into the key development and financial highlights. At a glance, we delivered further profitable organic growth in the first 6 months of our current fiscal year. Net sales grew by 4.4%, driven by a very satisfying spring season and solid summer period. In addition, we saw continued higher customer footfall. This growth was further supported by the store openings in Nuremberg and Duisburg, both in Germany around the start of the fiscal year.

On a like-for-like basis, HORNBACH Baumarkt sales rose by 3.6%. Gross margin increased by 4.6%, in line with the sales growth. And the gross margin come in at -- sorry, 34.9%, matching the level from prior year's period. This development contributed to the adjusted EBIT growth of 2.5%. CapEx reflects the active execution of our expansion strategy with a focus on acquiring attractive properties and building a state-of-the-art DIY store network. Nevertheless, we achieved a good free cash flow.

We are pleased with our performance in the first half of the current financial year. And despite ongoing macroeconomic burdens and soft consumer sentiment, particularly in Germany, we have achieved solid results, which are in line with our expectations. They also reinform our confidence in strength and resilience of our business model and underline our relevance to our customers. Therefore, we're confirming our full year guidance today.

Before we dive deeper into financials for the first half of the fiscal year, let me start with a brief operational update. As you know, customer satisfaction is one of the most important KPIs to our business, a clear indicator of meeting our customer requirements and we truly believe that a great shopping experience and assortment, combined with a highly efficient operational setup is what drives our market relevance and long-term profitability. That's why we are especially proud of the results from the latest customer service.

In Germany, the independent survey Kundenmonitor, ranked us #1 for overall customer satisfaction in the DIY sector. We also came out on the top in several other categories, including web shop, assortment relevance, selection, quality of the goods and private labels as well as service offered. In the Austrian addition of the Kundenmonitor, customer survey, we secured a leading position as well. We were ranked #1 overall in customer satisfaction, achieving strong results across multiple categories.

And also in Netherlands, the survey Retail of the Year, named us The Best DIY Online Shop. That's an important recognition of our team's hard work and a clear sign that we are on the right track. We are also continuing to invest in infrastructure to support our organic growth and improve the shopping experience for our customers.

Just recently, we opened 2 new stores, 1 in Bucharest, Colentina in Romania and another one in Eisenstadt in Austria. Both are modern big box DIY stores designed to give our customer everything we need for rare home improvement projects. These openings follow the launch of our new store in Duisburg, Germany, which opened in March, and there is more to come.

Another store is set up to open in Timisoara in Romania, just tomorrow. All of these new locations demonstrate our commitment to expanding our store network and growing across all HORNBACH regions. With that in mind, let's take a closer look at the sales figures for the reporting period.

As mentioned earlier, group net sales in the first half of the year were up by 4.4%, driven by a strong spring season and solid summer. Compared to the same period last year, we saw increased demand for our gardening products and construction materials. Customer frequency increased by 3.3%, reflecting a positive trend in store traffic. We also recorded a slight uptick in average ticket. After 2 years of stable performance, we are now back on a growth stat.

And now let's shortly have a look at HORNBACH Baustoff Union, our subgroup has mainly serves professional customers in the construction industry. Looking at the sales development, we saw a slight sales decline of 0.8%. That said, we believe the construction sector in Germany may have reached its lowest point and could now be starting to recover. The latest official statistical figures show a modest upward trend in both order intake and building impairments.

Looking at the geographic split on the right. Slightly more than half of the HORNBACH Baumarkt revenue, 52.7% comes from the 8 European countries outside of Germany representing an increase of approximately 1 percentage point compared to the previous year.

Now let's turn our attention to like-for-like sales growth. Generally speaking, underlying demand across most European countries in the first half of the current fiscal year benefited from warm and mostly dry weather. That said, July was quite rainy in Central Europe, which had some impact on -- in Q2. For the group-as-a-whole, like-for-like sales growth reached 3.6% clearly above last year's period. Germany contributed 1.5%, which put us ahead of the German DIY sector that saw a slight overall decrease in sales of 0.7%.

In other European countries, delivered a strong 5.6% growth rate. Here, the Netherlands really stood out with growth of over 10%. We successfully strengthened our position as a big box player in Netherlands. Customer particularly value our outstanding product availability in large quantities, which set us apart from competition. Thanks to store openings in recent years, our locations in Netherlands are younger in [indiscernible] and showing their [indiscernible] growth contribution. In Q2, all countries saw positive like-for-like sales development with the exemption of Germany, where performance were impacted by 2.8 fewer business days.

Let me now present the most recent market share improvement. We continue to focus on growing our market share and strengthening our position across Europe. In all HORNBACH countries where market share data is available, we managed to expand our footprint in January and July 2025. In Germany, our largest and most competitive market, our share has now reached 15.5%, an increase of 0.6 percentage points compared to the prior year period.

In the Netherlands, driven by a very positive footfall development, we gained 1.3 percentage points, bringing our total market share to 28.8%. In Czechia, we continued our positive momentum, increasing our market share to 38.5%. Austria and Switzerland also showed positive development. This truly reflects the dedication and outstanding performance of our teams on the ground who consistently go above and beyond to serve our customers.

Let's now continue with a closer look to our E-commerce business. Customer engagement across our interconnected platforms remained strong, which confirms that these are now well established sales channels. E-commerce sales at HORNBACH Baumarkt grew by a strong 10.1% in the first half of the year. That pushed our E-commerce share of total sales up to 13.1%, both Direct Delivery and Click & Collect performed well, with growth rate of around 11% and 7%, respectively.

And with that, I would like to take a closer look at costs and expenses in the P&L. Our gross profit increased by 4.6%, which is mostly in line with the growth in the net sales. Gross margin came in at 34.9%, matching the level of the same period last year. This reflects a good product mix and an innovative assortment.

Now let's take a look at expenses. We are now seeing the full impact of wage increases across all countries, which led to a rise in absolute personnel costs. Personnel expenses totaled EUR 580 million, representing a 5.7% increase. This development is in line with expectations given the wage adjustments. While selling and store expenses increased in absolute terms, the expense ratio remained stable relative to total sales. And the same applies also to general administrative expenses ratio. Preopening costs rose by EUR 4 million, driven by new store openings. All of this contributes to a positive development of our adjusted EBIT, which I will present to you on the next slide.

Overall, we improved our adjusted EBIT by 2.5% compared to the first half of last year, driven by successful spring season and solid summer performance. As a result, the adjusted EBIT margin remained broadly stable at 7.6%. Countries outside Germany contributed 62% to adjusted EBIT, making a 4 percentage point increase year-over-year. Once again, there were no significant nonoperating items or adjustments in the first half of the year.

And now let's now move on to the cash flow statement. Our cash flow from operating activities increased significantly compared to previous year. The main driver was a lower cash outflow from changes in working capital. This was predominantly due to reduced use of our [indiscernible] program as well as stronger reduction of inventories than in the prior year period. Funds from operations remain at the same level as last year. Capital expenditure in the first half of the fiscal year totaled EUR 107 million, up from EUR 51 million in the same period last year.

As planned, 56% of that was invested in land and real estate, mainly for the new store development. The remaining portion went toward store conversions, equipment and software. Free cash flow after net CapEx and dividend improved to EUR 129.6 million, reflecting the changes in working capital I just mentioned.

Now let's take a look at our balance sheet. As of the end of August, HORNBACH once again delivered a robust balance sheet. The total balance sheet stood at EUR 4.6 billion, unchanged compared to February. Decreased inventories reflect the usual seasonal reduction after Spring. Our equity ratio increased slightly to 46.9%, maintaining a strong and healthy position. Our net debt-to-EBITDA ratio improved to 2.4x. All in all, that underlines the strength of our financial foundation and the resilience of our business model.

We are confirming the guidance for the fiscal year '25/'26. We continue to expect net sales to be at or slightly above the level of prior year and adjusted EBIT to remain at the same level. However, given the strong earnings performance in Q1 and the solid development in Q2, we currently expect adjusted EBIT growth within the upper half of our guidance range.

Before we open the floor to questions, I want to take a moment to highlight our continued focus on strategic priorities, cost management and sustainable growth. Through target investments and operational efficiency, we are building a solid foundation for the future. With our strong private labels, everyday low price strategy and clear commitment to sustainability, we aim to support our customers, maintain market leadership and deliver long-term value to our shareholders. In summary, we're well positioned to navigate the current macroeconomic and geopolitical challenges and to size medium- and long-term growth opportunities in the home improvement sector. That gives us strong confidence in HORNBACH's continued successful development. As I mentioned at the beginning, we are satisfied with our results for the first 6 months which are in line with our expectations.

And with that, I will conclude my presentation and hand back to Antje for the Q&A session.

Thank you, Joanna for your views and remarks on our results. I now hand over to Bastian, our operator, to explain the technicalities of our Q&A session. Please go ahead.

[Operator Instructions]

So the first question comes from Thomas Maul from DZ Bank.

Thomas Maul, at DZ Bank. I've got 2. The first one, you achieved a nice increase in gross margin. Maybe you can elaborate a bit more on the drivers, especially with regard to the innovative products you just mentioned. And what is actually the share of private labels in your assortment? And second question, can you please shed some light on current trading in September with regard to footfall, leverage basket sizes in Germany and abroad and yes, what are your expectations for gross margins in the months to come?

Thomas. Thank you for your question. And happy to answer. I will take the first one on the margin. We improved our margin at, of course, in connection with the -- with our innovative product. During the year, we always change our assortment, nearly 20% of our assortment is changed during the year. And with the innovative assortment, we, of course, reach a better margin. And this is an effect of our, great [indiscernible] department. The second one -- the second question was how is -- how we expect the margin development in the half of the -- when I get you correctly?

Yes. It's actually on footfall and basket size and also, yes, the development of gross margin.

Okay. Okay. Thank you for the clarification. The footfall, we increased -- the footfall is increased in the first half of the year. We are gaining our market share in all countries. Therefore, of course, we hope that also there's a trend with -- remain also for the next half of the year. Of course, we are -- it's pretty clear that in Germany, the DIY sector faces near macro challenges, particularly in customer sentiment due to layouts in industry, many people are cautious about large projects. But nevertheless, nevertheless, customer traffic remained really strong, showing continued relevance of the DIY and Gardening. And we are pretty sure that our everyday low price strategy and strong private levels position us well, and we gained further market share -- we will again also cover market shares in the next half year.

Your question was also about the private label share. So let me comment on this point. So this is about -- about 20%, yes. So in Germany, a little bit more -- sorry, I'd say it was 28% and in Germany, 28% and in average for the HORNBACH something about 2024.

The next question comes from Jeremy Garnier from ODDO BHF.

I have 2 questions. So yes, you begin to have strong market shares in all countries you're present in Europe. Do you plan to open new countries soon or to accelerate in some countries? And also M&A is still not an option for you?

Jeremy, thank you for your question. Let me comment. Yes, we -- it's too early to go into the detail. But yes, we already announced the new country. So -- but I hope you can understand that we cannot comment in very detail at the moment.

Okay. And regarding the working capital, it will improve during H1. Do you still have room to continue to improve the deliver of inventory and [indiscernible], what is your target?

Of course, we always look for the working capital. And retail is about working capital management. And of course, we have a deeply look always at this issue. Of course, we have to consider the current situation also with the assortment changes therefore, sometimes you have a little bit more inventories, sometimes a little bit lower level. But nevertheless, of course, we have closed -- we look very, very focused on this issue. And we plan very good initiatives in respect of AI solutions with this matter. Of course, it will not be effective in this fiscal year. But nevertheless, our strategy is to use the AI solutions in the future to really focus on the working capital management and to really plan even better than in the past, the distributions, the logistic processes. We are on a good track in this matter.

The next question comes from Ralf Marinoni from Quirin.

First question is about your store in Romania. You mentioned that HORNBACH provides more than EUR 2 million for the expansion of public infrastructure to support development in the area and you have also created 120 new shops for the new market. So the question is, did you receive any government subsidies or tax benefits for this? And my second question is about the 4 new openings. Can you quantify the annual sales potential of 4 new markets when they are running at full steam? So I estimate it's clearly above EUR 100 million.

So I think the infrastructure you're mentioning -- sorry, it's Antje. The infrastructure around the normal stores. So we have streets and all those things that help us to connect also the store to our network to make it efficient and to help us around that. I think this is meant with the infrastructure thing. With respect to those subsidies, I'm not sure about that. We can take that afterwards, I think. Sorry on that. And expectations, for sure. But we do not disclose our business for each and every new store that will go on stream. However, we assume that this is a very good location because you know that the key thing to select location for us to have a good area, to have a good a little bit around -- surrounding there and so we expect that this will be a good addition there.

And the second question was, what does a new store brings in terms of revenue, yes?

Exactly, exactly.

It's a -- it really depends on the location, on the square meters in -- on the country. We are happy to open each store, yes. But and it's always based on a detailed business case. So yes, the decision is made very, very cautious. And -- but I would don't like to disclose very detailed information on each contribution of the each market or store. I hope you understand.

I understand. But maybe you can give us an indication with regard to profitability in your market in Romania. On the one hand, we have less purchasing power from the people there, which leads to less revenues compared to the stores like Germany also. But on the other hand, we have much smaller personnel cost. So maybe you can give us an indication for the EBIT margin and profitability in these stores in Romania.

Yes, you know that we do not disclose on a base of the different countries? So what you see is that the contribution from outside of Germany is very good. And as you can assume, we are also on track in Romania because it's a very interesting and attractive market. So this will also help to contribute that.

I can only add. Of course, there are countries which contribute more and would contribute less. But nevertheless, all countries are on a very, very good track. We are really happy with the development and also in Romania. It's really, really good country and therefore, we have attractive location there, and we are happy to expand in this country.

Next question comes from Miro Zuzak from JMS Invest.

I have a couple of questions. I'll take them one by one, if I may. The first one is regarding the situation in Germany. You mentioned during the presentation that you expect the German construction and renovation market to bottom out. Can you please substantiate this and elaborate on this? And what the indicators are that you're looking at?

Okay. So I think you're referring to construction market versus DIY market. I think this is an important thing.

The building sector shows early signs of recovery, like a recent increase in building payments and orders, but we expect that activity will only start to increase next year. However, with HORNBACH Baumarkt, we are mostly active in the renovation and modernization business, which is -- which has different dynamics than the new construction. In this matter, we need to focus on such topics as renovation backlog, need for energy-efficient upgrade and demographic challenges. And this is what what we are looking very positively towards this issue because the need is there. We increased our market share. And therefore, even in Germany, we see really chances for us. Even...

But you don't feel like at this moment already a recovery, it's just an expectation that in the future next year or so, it will recover?

Yes.

Albrecht Hornbach speaking. It's more or less a sentiment, which leads to the meaning that beginning maybe with 2026, the construction market will rise again and that the [indiscernible] is reached now in the moment. But this concerns HORNBACH mainly, and it's not a matter for Baumarkt for the Do-it-yourself business. Do-it-yourself business, it's more contributed to renovation and what Joanna explained just before. And fortunately, we are rather independent from construction markets in 96% of our turnover.

Okay. Super, very clear. Another question regarding costs. If I look at the OpEx, just basically, the cost between gross profit and EBITDA, I see a jump of EUR 30 million in Q2 versus last year Q2. This was a much higher jump compared to the EUR 15 million in Q1. So the OpEx seems to have increased much more in Q2 compared to Q1. Is this going to continue in Q3 and Q4? Was there any like special effect or reason in there, which led to this higher increase compared to Q1?

So the most important point is the increase in the personnel expenses, of course. As you know, last year, we had a lot of increases of the wages nearly in all countries, especially in Germany. And the effect, of course, we see now in the comparison of the half year. So the wages increased, of course. We -- just for your information, the total cost amounts to 5.7%. And we had an increase in full-time employees in connection with the new store openings.

Therefore, we have 2 effects. The first one is the amount of the people and employees and another one is the increase of the wages itself. To your question, whether we expect more increases during the next months, I would answer the question like in this way. Of course, we do not expect such big increases as last year. Last year was something special, especially in Germany. We were talking about 7% increases in the wages. This is not planned for Germany now. Of course, there will be some increases to balance somehow the inflation rate, of course. But we expect lower increases than 3%. This is the most point which explains the difference.

And there are 2 other points also which unfortunately contributed to our EBIT -- to our result. We had FX effect. As you know, we have derivatives, U.S. dollar derivatives and from the evaluation of the derivatives we have now. Last year, it was plus. And now we have lost from the derivatives. Therefore, we are talking about an effect of EUR 5 million, which is big, of course. And ...

Where are they booked -- sorry, by the way, are they in [indiscernible] or are they booked in the [indiscernible] are they in the financial results?

They are booked in the financial result.

So that's below EBIT.

Yes, yes. Yes. I thought your question was about the EBIT, EBITDA.

Well, I was asking about the OpEx, which would typically be above EBITDA. But anyway, No, that's fine, it's good to know, that would have been your next question.

Okay. Okay. So the most effect is really the wages and the personnel costs.

Okay. I have 2 more questions -- I have one more question and one suggestion. So the first one is the U.S. dollar change, which was like significant, right? How much will it contribute to the gross profit margin in the next quarters to come? Or to put the question the other way around, how much of your [indiscernible] of your purchases are in U.S. dollars?

It's a good question, and I'm really happy to answer this. We are lucky we are lucky in this respect that our -- we do not source a lot of products in U.S. dollar. Therefore, yes, it's even a lower amount than the 5% of our assortment. Therefore, we are not really impacted by the U.S. dollar in the margin. Nevertheless, of course, there are some. And our policy is always to hedge our direct U.S. dollar purchasing volume. 90% of our volumes are hedged. Therefore, for the future, I do not expect really changes in the margin.

Okay. Maybe you can get some points of price decreases from your European suppliers, who buy in China or in the U.S. area, right, which is now 10% or 15% plus expense. One more -- just one suggestion, you have on Page 13 in your free cash flow definition. You don't include leasing, which makes a big difference. I think just -- it would be a more meaningful number from year list to include leasing because you show EUR 130 million free cash flow of the CapEx and dividends, I would include -- it's just my personal opinion. I would include leasing there, which brings the free cash flow to a more accurate EUR 70 million instead of EUR 130 million. That's probably more accurate.

Okay. Yes, it's [indiscernible] you to hear your view on that. So thank you for this.

HORNBACH is always very solid and humble in terms of capital markets presentation, which I like. And therefore, I would show the lower number rather than a higher number in this case.

Okay. Thank you for your [indiscernible].

So as there are no further questions at this time. I will hand back to Antje for any closing remarks on this conference call.

Yes. Thank you very much for your question. And I think we have at least I'll address. I would also like to thank you, Joanna, and Albrecht for your valuable contribution today. And in the coming weeks, you'll find us also at various capital market conferences. We are very much looking forward to engaging with you in personal conversation. So please come to us if there are any further questions arise. And the details of our plans for [ IR traveling ] is also available on our website.

And as we now head into Autumn with its rich variety of colors and abundance, perhaps it will inspire you also to start a fresh DIY project around home and garden. Thank you again for your interest and time this morning, and we hope to see you soon and until then, take care. Thank you very much.